South Korean electric vehicle battery maker SK On said Monday it is reconsidering its plan to build a new battery plant in Turkey together with US auto giant Ford Motor, citing prolonged economic woes.

“We have held talks (with Ford and Turkish partner Koc Holdings) on the matter, but the process is lagging behind the schedule,” said an SK On official. “The final decision on whether to pull out of the deal is still pending.”

SK On said it is looking to change its investment plan due to sluggish global economy and bleak outlook.

In March, SK On signed a memorandum of understanding with Ford and Turkey-based Koc Holdings to build an EV battery plant with an annual capacity of 30-45 gigawatt-hours near the capital city Ankara. The deal worth 3 trillion-4 trillion won ($2.4 billion-$3.2 billion) aimed to start production from 2025.

The project was part of SK On’s ambitious strategy to expand its footing in the European market. Together with three EV battery plants in Hungary, the company aimed to produce a total capacity of 77.5-92.6 gigawatt-hours per year in Europe.

But the company’s already heavy global investments have pushed funding to dry up in the shrinking market, sources said.

SK On was in need of trillions of won in funds for the two new plants in the US for BlueOval SK, a joint venture with Ford, and plants in China and Hungary. It tried to raise some 4 trillion won through a pre-initial public offering from investors, but managed to secure just around 800 billion won. Its parent company SK Innovation announced last year it would finance 2 trillion won.

In 2022, it applied for a loan of approximately 3 trillion won for BlueOval SK from the US Department of Energy with Ford. If granted, the joint venture could take out a loan worth 30 percent of its business expenses by the second quarter.

“SK On’s rivals LG Energy Solution and Samsung SDI -- who are more financially stable -- are also reconsidering their global investment. Despite the burgeoning EV market, the battery makers should factor in an economic downturn to carry out well-balanced investment strategies,” said Kim Pil-soo, a car engineering professor at Daelim University.