Ford forms battery JV with SK to be vertically integrated
American automaker Ford Motor Company and South Korean conglomerate SK Innovation have signed a memorandum of understanding (MOU) to create a joint venture to produce approximately 60 gigawatts per hour (GWh) annually in traction battery cells and array modules, starting mid-decade, with potential to expand.
“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.
“We are delighted to be entering into collaboration with Ford, America’s leading and iconic automaker. Ford is one of the most active players in vehicle electrification today. We are proud to be opening this new chapter in their long history,” said Kim Jun, SK Innovation CEO and president. “Our JV with Ford will play a pivotal role in fleshing out the electric vehicle value chain in the United States, a key objective of the current U.S. administration.”
The creation of the JV, which will be called BlueOvalSK, is subject to definitive agreements, regulatory approvals and other conditions. Next-gen cells and arrays will be used to power several future Ford battery electric vehicles.
Blue Oval SK is a combination of Ford’s Blue Oval emblem and SK in SK Innovation’s name. The annual output of 60GWh produced by BlueOvalSK can power about 600,000 electric pickup trucks (each requires about 100kwh of battery).
“Through the JV, Ford and SK Innovation will jointly develop and industrialize battery cells at scale that are tailored to deliver optimum performance and value for our Ford and Lincoln customers,” said Lisa Drake, Ford’s North America chief operating officer. “SK Innovation is an important partner in helping deliver batteries with better range and value for our fully electric vehicles by mid-decade.”
Ford’s global BEV plan calls for at least 240 GWh of battery cell capacity by 2030 – roughly 10 plants’ worth of capacity. Approximately 140 GWh will be required in North America, with the balance dedicated to other key regions, including Europe and China.
“Global automakers have praised SK Innovations’ EV batteries for their safety, high capacity and long life,” said Jee Dong-seob, head of SK Innovation’s Battery Business. “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.”
About KRW6 trillion (USD5.3 billion) will be invested in this JV. Accordingly, along with the KRW3 trillion (USD2.6 billion) investment in Plant 1 and the plant in the U.S. state of Georgia, SK Innovation has announced a total of KRW9 trillion (USD8 billion) in building battery facilities in the U.S. The company expects to increase this amount in consideration of the market expansion in the future.