Enchem Abandons $143M US Plant Amidst EV Market Slump
Enchem Co., a South Korean battery materials maker, has abandoned plans to invest $143 million in a US plant. The decision, influenced by a slump in the US electric vehicle market and Ford's struggling EV business, will impact the local EV value chain.
Enchem's plant, intended to supply components to BlueOval SK LLC, a joint venture between SK On Co. and Ford Motor Co., was set to be built in Tennessee. However, Enchem has shifted focus to existing facilities in Georgia and Indiana instead.
The decision comes amidst a protracted downturn in the US stock market today, exacerbated by former US President Donald Trump's policies. His elimination of the EV tax credit is expected to significantly reduce EV demand. Ford CEO Jim Farley predicts the share of zero-emission vehicles in the US market could halve due to these policies. Ford's EV division has already incurred substantial losses, totalling $12 billion, including $2.2 billion in the first half of 2025.
BlueOval SK, with a total capacity of 127 gigawatt-hours by next year, may face underutilization of its facilities due to reduced EV demand. This, along with challenges in the global EV market during Trump's administration, led to the scrapping of the initial plan for an electric vehicle battery production plant in the USA.
Enchem's revised strategy, along with similar moves by other companies, is expected to impact the local EV value chain. The shift in investment focus may lead to job changes and economic ripples in the affected regions. Despite these setbacks, the stock market today is expected to rebound as governments worldwide continue to promote clean energy initiatives.
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