Three Joint Ventures Unravel Simultaneously: A Historic Turning Point
In February 2026, the global electric vehicle supply chain is experiencing a structural earthquake. The joint venture partnerships between South Korean battery manufacturers and American automakers — once heralded as the cornerstone of North America’s EV industrialization — are disintegrating at a pace that has stunned industry observers. Stellantis is reviewing the liquidation of StarPlus Energy, its battery joint venture with Samsung SDI in Indiana. General Motors has officially cancelled plans for a third Ultium Cells plant with LG Energy Solution. Ford has agreed to split the assets of BlueOval SK, its partnership with SK On. These three developments, occurring nearly simultaneously, signal the definitive end of the Korea-US battery alliance model that dominated EV supply chain strategy since the early 2020s.
The scale of this unwinding is extraordinary. Just three years ago, these joint ventures represented over $20 billion in combined investment and were positioned as the backbone of America’s domestic EV battery supply chain. Today, they have become the most visible casualties of the global EV market’s painful correction from euphoria to rationality. For South Korea’s three battery champions — Samsung SDI, LG Energy Solution, and SK On — the simultaneous reassessment of their entire North American strategy represents an unprecedented challenge in the industry’s history.
Stellantis: €22 Billion in EV Losses Forces Radical Strategic Reversal
Stellantis’s retreat is the most dramatic of the three. On February 6, the multinational automaker disclosed that its cumulative losses from EV-related businesses had reached €22 billion — a staggering figure that immediately triggered a fundamental strategic recalibration. The company’s CEO publicly announced a plan to refocus on internal combustion engine vehicles and explicitly stated that Stellantis would scale back its EV operations in the United States. This represents a complete reversal of the aggressive electrification roadmap the company had pursued since its formation through the Fiat Chrysler-PSA merger.
The operational consequences are severe for Korean partners. Stellantis is not only reviewing the liquidation of StarPlus Energy with Samsung SDI but is also effectively withdrawing from NextStar Energy, its joint venture with LG Energy Solution in Canada. Reports indicate that Stellantis has already made the decision to withdraw and is currently negotiating the specific procedures and timeline for the liquidation with Samsung SDI. This means two major Korean battery companies are simultaneously losing joint venture projects from the same customer — a double blow to their North American capacity planning. The StarPlus Energy plant, where each company contributed a 50% stake in 2022, lasted less than four years as a functioning partnership.
GM and Ford: Short-Term Profitability Trumps Long-Term Electrification Vision
General Motors’s strategic pivot is equally significant. As a flagship of American automotive manufacturing, GM had planned to gradually expand US battery production capacity through Ultium Cells, leveraging LG Energy Solution’s technology and manufacturing expertise. However, with EV sales growth decelerating sharply, GM officially cancelled plans for the third plant, redirecting its focus toward stabilizing utilization rates at the first and second facilities. The company publicly declared it would moderate the pace of its EV transition and adjust investment plans accordingly — a remarkable shift from the “all-in on EVs” rhetoric that dominated GM’s communications just two years earlier.
Ford has moved even more aggressively. The company agreed to split the assets of BlueOval SK, which was once regarded as a key pillar supporting Ford’s North American EV strategy. As Ford reduces its EV investment scale and pivots toward a strategy centered on hybrids and internal combustion engine vehicles, maintaining a capital-intensive battery joint venture no longer aligns with its revised priorities. Analysts interpret this as a clear signal that short-term profitability has taken precedence over long-term plans to internalize battery production. Ford’s decision carries particular symbolic weight — when one of America’s largest automakers explicitly chooses hybrids over pure EVs, it reshapes expectations across the entire value chain.
Structural Flaws Exposed: Why the JV Model Collapsed
The collapse of the Korea-US battery alliance reveals fundamental structural weaknesses in the joint venture model itself, rather than merely reflecting cyclical market conditions. Korean battery companies entered North America en masse in the early 2020s, incentivized by the US Inflation Reduction Act (IRA) and other policy measures that rewarded domestic battery production. The core assumptions were straightforward: EV demand would sustain annual growth rates exceeding 40%, local manufacturing would capture policy subsidies, and the JV structure would distribute investment risk between partners.
When EV demand growth decelerated to single digits, these assumptions collapsed in sequence. More critically, the inherent conflicts within the JV model were amplified by the downturn. American automakers were simultaneously JV partners and the primary customers for the batteries produced. When they decided to cut EV production, the JV plants immediately faced overcapacity and order shortfalls. Korean companies, despite possessing world-class battery technology, lacked independent sales channels and customer diversification within the JV framework. Samsung SDI, LG Energy Solution, and SK On had each effectively tied their North American strategies to a single automotive partner — a concentration risk that proved catastrophic when those partners reversed course.
ESS Conversion: A Lifeline or a Mirage?
Facing the collapse of their automotive JV projects, Korean battery makers are actively exploring the conversion of North American plants to produce energy storage system (ESS) batteries. The global energy storage market is experiencing explosive growth, particularly in the United States, driven by surging renewable energy installations, grid modernization requirements, and the data center construction boom. The US ESS market is projected to grow by more than 300% over the next five years, and from a technical standpoint, there is meaningful compatibility between EV and ESS battery manufacturing processes.
However, industry observers caution that this transition faces significant headwinds. Facility modifications require 12-18 months and substantial capital investment, covering equipment adjustments, process optimization, and quality certification. The ESS customer base is fundamentally different from automotive customers, requiring Korean companies to build new sales channels and relationships from scratch. Perhaps most importantly, the ESS market, while growing rapidly, is already fiercely competitive — Chinese companies including CATL and BYD possess formidable capabilities in storage batteries and maintain significant cost advantages. Whether ESS conversion can genuinely alleviate the short-term profitability pressure facing Korean battery enterprises remains an open question.
Global Battery Supply Chain Reconfiguration: From Bilateral Alliance to Multipolar Competition
The disintegration of the Korea-US battery alliance is accelerating a fundamental reconfiguration of the global battery supply chain. In North America, the retreat of Korean companies is creating space for other players. Chinese battery manufacturers face FEOC (Foreign Entity of Concern) restrictions but are increasingly penetrating the North American market through technology licensing agreements and joint ventures with non-Chinese entities. Meanwhile, Japanese companies — particularly Panasonic, which maintains a deep partnership with Tesla — find themselves in a relatively advantageous position during the current upheaval. The competitive landscape is shifting from a Korea-US alliance-dominated structure toward a more multipolar arrangement featuring Chinese, Korean, and Japanese companies in direct competition.
The lessons from the Korea-US battery alliance collapse extend far beyond the battery sector. They underscore a broader truth about supply chain architecture in an era of demand uncertainty: excessive dependence on single partnership models and single-market strategies creates catastrophic vulnerability when demand conditions shift. As the global EV market transitions from policy-driven growth to market-driven dynamics, supply chain strategies must evolve from prioritizing speed and scale toward emphasizing resilience and flexibility. The companies that thrive in the next phase of the EV revolution will be those that build diversified customer portfolios, maintain optionality across multiple end markets, and avoid the kind of concentrated bets that brought the Korea-US battery alliance to its knees.
Source: asiae.co.kr
