LG Energy Solution, Ford strengthen partnership with 109GWh EV battery deal

LG Energy Solution's Ochang Energy Plant / Courtesy of LG Energy Solution

LG Energy Solution (LGES) will supply 109 gigawatt-hours of batteries for Ford’s commercial electric vehicles (EVs), reinforcing the strong partnership between the two companies as they aim for leadership in the global commercial vehicle market, Korea's leading battery maker said, Tuesday.

LGES said it signed two separate deals with Ford to supply 34 gigawatt-hours of batteries from 2026 to 2030 and 75 gigawatt-hours from 2027 to 2032. The batteries covered by these agreements will be manufactured at LGES' plant in Poland, beginning in 2026.

The batteries that LGES will supply to Ford are reportedly set to be used in the U.S. automaker's new commercial EV, the E-Transit.

The contract encompasses new orders and addresses a failed attempt by the two companies to establish a joint venture in Turkey.

In February of last year, the companies signed a memorandum of understanding (MOU) to establish a joint venture near Ankara, Turkey, aimed at creating a 25 gigawatt-hour plant with plans to begin mass production in 2026. However, the non-binding MOU was terminated in November due to concerns that the current pace of EV transition may not be suitable for further investments in battery cell production.

At that time, LGES said Ford’s commercial EV plans would remain unaffected. LGES also said it will supply battery cells for the same commercial EV from existing plants under the partnership.

LGES anticipates that the latest contracts will bolster its competitiveness in securing orders and enhance the efficiency of its plant in Poland.

While the market for batteries used in commercial EVs is viewed as highly lucrative, it also presents technical challenges. Commercial vehicles require larger battery capacities to accommodate longer average driving distances and must be durable enough to operate effectively in harsh weather conditions.

The European commercial EV market is experiencing rapid growth, with global research firm LMC Automotive projecting that half of the commercial vehicles in the region will be battery-powered by 2030.

“These agreements attest to our experience and expertise in powering commercial vehicles with innovative battery technologies designed to handle extreme user environments,” LGES CEO Kim Dong-myung said.

“Capitalizing on our local production capacity, we will secure leadership in the European market and deliver unmatched value to our customers through advanced battery technologies that effectively address diverse needs.”

The two companies also agreed that batteries for the current Ford Mustang Mach-E will be produced at LGES' Michigan facility in 2025, rather than in Poland, to improve business efficiency and take advantage of competitive market conditions, including tax credits related to the U.S. Inflation Reduction Act.