Ford Motor Co. is Forming EV Battery Joint Venture with SK Innovation Called ‘BlueOvalSK'
Ford Motor Co is following its U.S. rival General Motors in setting up a joint venture with a battery partner to produce electric vehicle batteries at scale. The announcement comes one day after Ford unveiled its F-150 Lightning electric pickup, the battery-powered version of the most popular truck in the U.S.
Ford and South Korea-based SK Innovation announced today they have signed a memorandum of understanding (MoU) to create a joint venture EV battery company called "BlueOvalSK" to produce approximately 60 GWh annually in battery cells and array modules. Battery production is scheduled to begin by mid-decade, with potential to expand as Ford introduces new electric models.
"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."
SK Innovation is a global energy conglomerate headquartered in Seoul, South Korea. The company has pioneered the development of EV batteries since 1991 and has expanded its battery operations globally since 2010.
SK Innovation specializes in the development and commercialization of high-nickel NCM battery technology. The company developed the world's first NCM-811 battery back in 2016 and continued to innovate and to develop the world's first Nickel 9 battery that will be mass produced in the U.S. for Ford's new F-150 Lightning.
"SK Innovation will be supplying batteries for the fully electric version of Ford's legendary and best-selling F-150 pickup truck. We are thrilled to be supporting the electrification of a vehicle that represents the very best of American automaking," said Jee Dong-seob, Head of SK Innovation's Battery Business.
Ford's global battery electric vehicle (BEV) plan calls for at least 240 gigawatt hours (GWh) of battery cell capacity by 2030. Ford said that approximately 140 GWh will be required in North America, with the balance dedicated to other key regions, including Europe and China, which is the world's biggest auto market.
SK Innovation already operates a battery plant in Commerce, Georgia, and is expanding its production capacity in the Europe and China. SK Innovation plans to become one of the world's top three EV battery suppliers by 2025 with over 125 GWh in global production capacity.
Ford's U.S. rival General Motors has also formed a joint venture for EV battery production with LG Energy Solution named Ultium Cells LLC. Last month, GM announced a $2.3 billion investment to build a second EV battery cell manufacturing plant in the U.S. in Tennessee.
In February, SK Innovation said it vowed to return to producing electric vehicle batteries in the U.S. after being hit with a 10-year import ban by the U.S. International Trade Commission (ITC) over the theft of trade secrets from rival LG Energy Solutions.
LG Energy Solutions is a wholly owned subsidiary of LG Chem and supplies EV batteries to U.S. automakers Tesla and General Motors.
LG Chem filed its trade complaints against SK Innovation in 2019 and sought to block the company from producing battery cells in the U.S., as well as importing the components necessary to make battery cells.
However SK's pre-existing agreement with U.S. automaker Ford Motor Co. to supply batteries for the F-150 Lightning was allowed to remain in place. SK is being allowed to import components for the domestic production of lithium ion batteries for Ford's electric F-150 Lightning for a period of four years.
Ford plans to soon deliver its fifth-generation lithium ion batteries and prepare for the transition to newer style solid-state batteries, which offer longer range, lower cost and safer EVs for customers.
To support its longer-term battery plans, Ford is investing more in battery R&D. Last month, Ford announced a new global battery center of excellence named "Ford Ion Park" to accelerate its battery and battery cell technology R&D, including future battery manufacturing. The Ford Ion Park team has already begun its work.
Ford is also investing $185 million in a collaborative learning lab in Southeast Michigan that's dedicated to developing, testing and building vehicle battery cells and cell arrays. The facility is scheduled to open late next year.
Earlier this month, Ford announced a second investment in battery company Solid Power, an industry-leading producer of all-solid-state batteries for EVs. Ford contributed to a $130 million Series B investment round in which the BMW Group became an equal equity owner in the battery maker along with Ford.
Ford initially invested in Solid Power in 2019. The additional investment will help accelerate the development of solid-state vehicle battery technology.
Solid-state batteries are showing great promise. They don't use the liquid electrolyte found in conventional lithium-ion batteries, can be lighter, with greater energy density which translates into longer range. They also can be made on existing lithium-ion battery lines, allowing Ford to reuse about 70 percent of its capital investment in lithium-ion manufacturing lines, the company said.
"SKI is an important partner in helping deliver batteries with better range and value for our fully electric vehicles by mid-decade," said Lisa Drake, Ford's North America Chief Operating Officer.
Ford has committed at least $22 billion through 2025 to develop new electric vehicles and its new EV battery joint venture will help ensure the company has all of the batteries its needs to compete in the EV space.
The creation of the joint venture is subject to definitive agreements, regulatory approvals and other conditions.
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