Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
US carmakers significantly impact Korean battery firms' plans
A Ford F-150 Lightning electric pickup truck is displayed for sale at a Ford dealership in Glendale, Calif., Wednesday (local time). AFP-Yonhap
By Park Jae-hyuk
Ford revises cooperation plans with LG, SK
Korean battery firms have been consistently impacted by U.S. automakers frequently altering their plans for electric vehicle (EV) production amid decelerating global demand.
Ford Motor announced on Wednesday (local time) that it and LG Energy Solution (LGES) plan to shift some of the Mustang Mach-E’s battery production from Poland to Michigan in 2025 in order to qualify for the benefits of the Inflation Reduction Act.
The U.S. firm also announced that BlueOval SK, its joint venture with SK On, will begin manufacturing cells for the current E-Transit with enhanced range and F-150 Lightning at the Kentucky 1 plant in mid-2025 — earlier than planned — and start producing cells at the Tennessee plant in late 2025 for Ford’s new electric commercial van to be built at the carmaker’s Ohio plant.
Additionally, lithium iron phosphate (LFP) battery production is on track to begin in 2026 at BlueOval Battery Park Michigan, according to Ford.
“An affordable EV starts with an affordable battery,” Ford CEO Jim Farley said. “If you are not competitive on battery cost, you are not competitive.”
The announcement was made as Ford scrapped its plan to produce all-electric three-row SUVs and disclosed its additional strategies to reduce costs.
Both LGES and SK On remained cautious about commenting on their customers’ decisions.
Earlier this month, Ford, SK On and EcoPro temporarily halted the construction of their joint cathode materials plant in Canada, following the previous suspension in April.
Although EcoPro cited the redesigning of the factory, changes in Ford’s electrification strategies have been mentioned as the main reason for the suspension.
“We are in continuous talks regarding this issue,” SK On CEO Lee Seok-hee told reporters on his way to attend SK Group’s Icheon Forum 2024 at Grand Walkerhill Seoul, Monday.
The construction of the third U.S. battery plant of Ultium Cells, a joint venture between LGES and General Motors, has also been suspended recently, as the carmaker has continuously cut its planned production of EVs.
YoulChon Chemical was hit by the suspended factory construction, as Ultium Cells canceled a $1 billion contract with the Korean firm to source aluminum pouches protecting battery materials.
Last month, YoulChon said that it would take legal action against the cancellation.
In 2023, LGES’ plan to establish a joint venture with Ford in Turkey fell through.
At that time, their Turkish partner Koc Holdings cited its consideration regarding EV adoption and inappropriate timing for battery investment as the reasons for its decision to revoke its participation in the project.
“It is difficult for Korean battery companies to complain about decisions made by American carmakers, as the U.S. is the biggest market for producers of EVs and batteries,” a Korean battery industry official said on condition of anonymity.