Ford Motor Co. will work with LG Energy Solution Ltd. to establish a new battery plant in Turkey rather than SK On Co., according to Bloomberg.
The US automaker seeks to hasten the transition to cleaner vehicles and diversify its battery suppliers.
Partnership with LG
Ford and LG Energy Solution intend to sign a memorandum of understanding in the coming weeks, most likely in late January or early February, say two people familiar with the situation who declined to be named because the change in partners is private.
What would happen with Ford-SK On partnership?
The American automaker will continue working with SK Innovation’s battery unit, SK On, on new initiatives like building new factories in the US and boosting productivity at a plant in Hungary to produce 2 million electric vehicles annually by the end of 2026.
According to a preliminary agreement from March of last year between Ford, SK On, and Turkish conglomerate Koc Holding, the facility in Turkey is anticipated to open as soon as 2025 with an annual output of 30 to 45 gigawatt hours.
Previous media reports stated that Ford had abandoned its proposal for the Turkish plant, not that the company had switched business partners.
What about the project?
The battery project is on schedule, according to a Ford spokesman. LG Energy Solution chose not to respond.
Jim Farley, the CEO of Ford, has pledged to invest $50 billion in the design and production of electric vehicles. With its first brand-new assembly facility in 50 years and a new SK battery plant in Tennessee, the automaker is stepping up its EV and battery production. Ford’s electric F-150 Lightning pickup is built in Michigan using batteries made by SK. In contrast, the Mustang Mach-E is built in Mexico using batteries from LG. Ford is also looking to collaborate with Contemporary Amperex Technology Co. of China to build a battery plant in the United States.
Ford’s efforts center on constructing regional battery plants, but the region’s high energy costs are challenging. Tesla Inc. is reportedly delaying battery production at its factory outside of Berlin, and Swedish battery manufacturer NorthVolt AB is rethinking plans to open a factory in Germany.
SK On told Bloomberg News that it had yet to decide whether to end talks with Ford about establishing the joint venture in Turkey.
Ford shares were up 0.3% to $12.61 at 9:42 a.m. in New York, little changed from when trading began. LG Energy Solution completed trading in Seoul with a gain of 4.5%.
