SK On hit by Ford's decision to halt F-150 production over battery issue

The Korea Times

The Korea Times

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Tue, October 3, 2023 | 03:04

Companies

SK On hit by Ford's decision to halt F-150 production over battery issue

Posted : 2023-02-15 16:50

Updated : 2023-02-15 17:02

Ford Motor's F-150 Lightning electric pickup is parked at the construction site of BlueOval SK's factory in Kentucky in this January file photo. Korea Times file

By Park Jae-hyuk

SK On is facing questions about the quality of its electric vehicle (EV) batteries after Ford Motor cited a "potential battery issue" as the reason for its abrupt decision to halt the production of F-150 Lightning pickup trucks equipped with the Korean firm's product.

The U.S. carmaker told foreign news outlets on Tuesday (local time) that the company has paused production and shipments of the electric pickup since last week, due to a possible battery problem which is under investigation. There was no sales suspension for vehicles already on dealers' lots, but it remains uncertain when Ford will resume production.

The U.S. carmaker's recent notification came amid growing concerns over the possible termination of the partnership between SK On and Ford, after they agreed to set up a U.S. joint venture named BlueOval SK.

A day before the notification, Ford unveiled its plan to build a lithium iron phosphate (LFP) battery plant in Michigan by licensing technologies from China's CATL, which has the world's largest market share. Starting from 2024, the carmaker plans to introduce LFP batteries on F-150, which has used nickel, cobalt and manganese (NCM) batteries made by SK On.

A few weeks earlier, Ford and SK On decided to drop their plan to establish a joint venture in Turkey. The U.S. firm said at that time that it was seeking a partnership with another Korean battery maker, LG Energy Solution (LGES).

In response to concerns, SK On emphasized its intent to maintain its partnership with Ford. The Korean firm's factories in the U.S. state of Georgia, which have been supplying batteries for F-150, are still in operation, despite the halted production of the electric pickup.

"We are investigating the matter," an SK On spokesman said. A spokesperson from Ford's Korean subsidiary was unavailable for comment.

Investors, however, took the issue seriously, unloading their shares in SK Innovation, the parent of the unlisted SK On.

The oil refiner's stock price plunged 7.46 percent during Wednesday's trading session.

In contrast, the stock price of LGES rose temporarily to 543,000 won ($423) during intraday trading from the previous session's closing price of 528,000 won, although the share price closed eventually at 527,000 won on Wednesday, in line with the sharp decline in the benchmark KOSPI.

pjh@koreatimes.co.kr