“Politics giveth and politics taketh away. May political risk become more of a constraint for those companies (think battery, wind, and solar) that feast off special government favor instead of fundamental consumer demand.”
The domestic EV market–and the battery industry serving it–is in steep decline. The latest? “SK Battery America cuts 958 jobs at Georgia plant amid EV sales slowdown.” Subtitle: The South Korean battery manufacturer reduced its workforce at its Commerce, Georgia, facility by about 37% as EV demand weakens and policy changes reshape the market.
Author Ashby Lincoln explained how shifting market and political winds resulted in the malinvestment.
SK Battery America stated it is still committed to long-term battery investments for the U.S. with business from Volkswagen and Hyundai models. But …. “Volkswagen Pumps the Brakes on Major US Factory Plans” … “Hyundai, Kia cut and delay EV models.” In all, as yesterday’s post documented, 18 EV carmakers have announced cutbacks or other retreats, the subject of yesterday’s post.
Company Update Needed
The webpage of the all-good-things company needs to be updated to account for the large reduction in force. It currently reads:
We’ve solidified supply agreements with top-tier global automotive leaders at the forefront of the electric vehicle revolution. Our commitment to expanding the electric vehicle battery industry extends to collaboration across diverse sectors in the U.S. We maintain enduring partnerships with prominent companies, rooted in advanced technology and steadfast reliability.
Well, the (mega)agreement with Ford is kaput. The advertised workforce of 2,600 is incorrect. Moreover, the company’s planned new battery plant in Tennessee is at risk. A recent study by the Federal Reserve Bank of Dallas warned:
The projects under construction reflect a significant amount of potential capacity, especially when considering those focused on EVs. The fate of these plants hangs in the balance, whether they will be canceled or postponed indefinitely in 2026 due to the changing dynamics of the U.S. battery market.
Politics giveth and politics taketh away. May political risk become more of a constraint for those companies (think battery, wind, and solar) that feast off special government favor instead of fundamental underlying consumer demand.
Do not ever trust any politician.