Ford announces joint venture to manufacture EV battery cells in U.S.

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Dane Hardware (right), Ford design and release engineer, and Mary Fredrick, Ford battery validation engineer, measure the voltage of a battery using a digital multimeter at Ford’s Battery Benchmarking and Test Laboratory in Allen Park, Michigan.


DETROIT – Ford Motor plans to form a joint venture with South Korean battery maker SK Innovation that will eventually manufacture battery cells for electric vehicles in the U.S.

The companies on Thursday announced they have signed a memorandum of understanding for a joint venture that will be called BlueOvalSK. Production of the battery cells as well as supporting modules is expected to start by mid-decade, they said.

The announcement comes amid an expected surge in electric vehicle sales as well as a push by the Biden administration to increase domestic production of critical technologies for EVs such as battery cells, which power the vehicles.

“As the industry changes, we have to insource now,” Ford CEO Jim Farley told reporters Wednesday night during the unveiling of the automaker’s new electric F-150 Lightning pickup.

The supply and production of battery cells are crucial for automakers pivoting to electric vehicles. Farley compared it to automakers building their own engines and powertrain components in the early 1900s. He said it will help avoid any potential future shortages like the industry is currently experiencing with semiconductor chips.

By 2030, Ford expects to produce up to 140 gigawatt (GWh) hours of energy for battery cells annually  in North America and up to 240 GWh globally.

In the U.S., the companies plan to initially produce up to 60 GWh a year. That would be enough power for about 600,000 of automaker’s electric Mustang Mach-E crossover, Hau Thai-Tang, Ford’s chief product platform and operations officer, told the media during a call Thursday.

The creation of the joint venture, which was first reported Wednesday by Reuters, is subject to definitive agreements, regulatory approvals and other conditions.

In May, CNBC first reported Ford expected to sell enough EVs to begin manufacturing its own battery cells by 2025.

Ford didn’t plan to make its own battery cells until Farley took the helm on Oct. 1. He changed the course set by his predecessor, Jim Hackett, who had said the automaker saw “no advantage” in producing battery cells.

Ford’s largest crosstown rival, General Motors, is years ahead on its EV battery plans, recently announcing its second $2.3 billion Ultium plant in the U.S. to produce battery cells through a joint venture with LG Chem. The two companies are already building an Ultium Cell plant in Lordstown, Ohio, that’s scheduled to be finished in 2022.

Both of GM’s plants in the U.S. are expected to come online ahead of Ford’s production.

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