SK, Ford to form W6 tril. EV battery joint venture in US
Bill Ford, Jr., Executive Chairman of Ford Motor Company, speaks at the reveal of the new all-electric Ford F-150 Lightning pickup truck at Ford World Headquarters, May 19. AFP-Yonhap
South Korean battery maker SK Innovation (SKI) and American automaker Ford Motor will establish a 6 trillion won ($5.3 billion) joint venture in the United States to produce batteries for electric vehicles, the two companies said Thursday.
The two companies signed a memorandum of understanding on the joint venture, called BlueOvalSK, to build a battery factory with 60 gigwatt hours (GWh) of production in the U.S. by the mid-2020s.
Their announcement comes a day before President Moon Jae-in meets with U.S. President Joe Biden in Washington on Friday (U.S. time) to discuss bilateral issues, including cooperation in the growing EV industry.
SKI, a refinery-and-battery unit under Korea's No. 3 conglomerate SK Group, has been building a $2.6 billion battery factory in Georgia, which will supply batteries for Ford's F-150 EVs from next year.
SKI aims to expand its global battery production capacity to 85 GWh in 2023 and over 125 GWh by 2025, and the joint venture will expand the capacity to 190 GWh in the next five years, it said.
The joint venture deal comes after SKI last month agreed to pay $1.8 billion to its bigger home rival LG Energy Solution (LGES) to settle a battery trade secret case, which had clouded its EV battery business in the U.S.
The settlement averted the worst-case scenario for SKI, which would have had to abandon its Georgia factory if the 10-year import ban took effect, weighing on the Biden administration's EV push.
'The joint venture is expected to play a key role in the U.S. administration's strong drive for the EV industry value chain,” SKI CEO Kim Jun said in a joint statement.
The SK-Ford partnership is expected to be similar to what LGES has with another American automaker, General Motors, with the two jointly building battery factories in Ohio and Tennessee.
Ford has said it will invest $22 billion in electrification by 2025, vowing to step up efforts to build its own batteries for stable supply of the key component.
“This MOU is just the start; it's a key part of our plan to vertically integrate key capabilities that will differentiate Ford far into the future,” said Jim Farley, Ford president and CEO. “We will not cede our future to anyone else.”
The battery deal is expected to spice up the upcoming bilateral summit as Biden has made boosting EVs a top priority for his $2 trillion infrastructure plan.
Biden pitched his $174 billion EV proposal during his visit to Ford's EV plant in Michigan earlier this week, and Moon plans to stop over at SKI's Georgia plant on his way back home. SK Chairman Chey Tae-won will also visit the Georgia plant during his U.S. visit this week, according to company officials. (Yonhap)