Ford Motor and SK Innovation Announce North American EV Battery Joint Venture
Ford Motor Co (FN) and South Korean battery maker SK Innovation (096770.KS) announced Thursday that they will form a North American battery joint venture to support the deployment of electric vehicles from America’s second-largest automaker.
The companies said they signed a memorandum of understanding for setting up the company, called BlueOvalSK. Reuters on Wednesday announced plans for the joint venture. Read more
Details of the company’s ownership structure will be set out in the finalized deal, expected later this summer, Ford said.
The project expects the partnership to produce around 60 gigawatt hours (GWh) per year in traction battery cells and array modules, starting in the mid-decade, with potential for expansion, the companies said.
That target would amount to two jointly owned factories, the locations of which have not been identified, Lisa Drake, Ford’s North American COO, said on a call with reporters.
Ford’s global EV plan calls for at least 240 GWh of battery cell capacity by 2030, or about 10 factories, said Hau Thai-Tang, head of Ford’s product platform and operations. About 140 GWh will be needed in North America, the rest in other regions, including Europe and China.
“This is really to support the delivery of our winning BEV programs which are now in line with Mach-E, E-Transit and the F-150 Lightning, but this is just the start,” Thai-Tang said, referring to the electric crossover, delivery van and pickup truck Ford has developed.
SK Innovation’s battery marketing division chief Yoosuk Kim also said the company plans to manufacture batteries for other vehicle programs at various U.S. sites in the future.
Discussions around the joint venture accelerated last month after SK Innovation agreed to pay $ 1.8 billion to LG Energy Solution, a wholly-owned subsidiary of LG Chem Ltd (051910.KS), to settle the charges of LG’s commercial flight by its rival, a source previously told Reuters. Read more
The dispute, which the administration of US President Joe Biden was set to settle with a ruling, had endangered SK Innovation’s battery cell plant in the US state of Georgia, where it has invested 2, $ 6 billion. This plant, currently under construction, will serve Ford and the German company Volkswagen AG (VOWG_p.DE).
Biden on Tuesday called for government subsidies for new battery production facilities as part of a $ 174 billion EV proposal during a visit to a Ford EV plant in Michigan. He also urged automakers to support job creation represented by unions. Read more
The United Auto Workers, which represents American hourly workers at Ford, said Thursday the automaker has a “moral obligation” to ensure that jobs at battery factories are well-paying union jobs. Drake said this will be determined by the joint venture.
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