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South Korean battery maker LG Energy Solution Ltd. announced on Wednesday that a massive deal to supply batteries to Ford Motor Co. is now over. The American car company sent a notice to cancel the agreement because it is changing its plans for electric cars. This deal was worth about 9 trillion won (USD 6.09 billion), as per a report by Pulse, the English service of Maeil Business News Korea.
The cancelled contract was a very large one for LG Energy Solution as it involved sending 75 gigawatt-hours of batteries to Ford over a period of six years. These batteries were supposed to be delivered between the years 2027 and 2032. The money from this deal makes up 28.5 per cent of LG's recent annual revenue. LG Energy Solution, in a regulatory filing, said, "This termination resulted from Ford's decision to halt production of certain EV models due to recent changes in the policy environment and EV demand outlook and its subsequent notice of contract cancellation." Before this happened, the two companies had a long-term plan. In October 2024, they signed a deal to supply enough batteries to build 1 million electric vehicles, valued at 13 trillion won (USD 8.86 billion). This larger plan was divided into two parts. One part was for the batteries that have now been cancelled. The second part was for 34 gigawatt-hours of batteries to be sent between 2026 and 2030. The batteries were going to be made at a factory in Poland and used in Ford's electric delivery vans called the E-Transit. "As Ford adjusts its electrification strategy and rebalances its portfolio, some projects that had been included in our order pipeline have been canceled," the report quoted an official from LG Energy Solution. Ford is now moving its focus toward making more hybrid cars and cars that run on gasoline. This change happened after the government under Donald Trump stopped giving special tax benefits to people who buy electric cars. Because it is now harder to make a profit from large electric vehicles, Ford is choosing to focus on cheaper electric cars and energy storage systems (ESS). (ANI)
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