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Ford will partner with LG Energy Solution to build a new battery plant in Turkey, dropping a deal with SK On, as the US carmaker seeks to speed up the shift to clean cars and diversify its battery suppliers.
Ford and LG Energy Solution plan to sign a memorandum of understanding within the coming weeks, probably in late January or early February, according to two people with knowledge of the matter who asked not to be named because the change in partners is not public.
The US carmaker will continue to work with SK Innovation’s battery unit, SK On, on other projects, including building two factories in the US and increasing capacity at a plant in Hungary, part of a push to make 2-million electric vehicles annually by the end of 2026. The facility in Turkey is slated to open as soon as 2025 with an annual capacity of 30 to 45 gigawatt hours, according to an initial accord from March last year between Ford, SK On and Turkish conglomerate Koc.
Previous media reports said Ford had scrapped its plan for the plant in Turkey, not that the company was changing partners. A spokesperson for Ford said the battery project is on track. LG Energy Solution declined to comment.
Shares of Ford were little changed in early trading, rising 0.3% to $12.61 at 9.42am in New York. LG Energy Solution closed trading in Seoul with a gain of 4.5%.
Ford CEO Jim Farley has committed $50bn to developing and manufacturing electric vehicles (EV). The carmaker is accelerating electric EVs and battery production, including its first all-new assembly plant in a half century alongside a new SK battery plant in Tennessee.
SK makes batteries for Ford’s electric F-150 Lightning pickup produced in Michigan, while LG supplies the batteries that power the Mustang Mach-E the carmaker manufactures in Mexico. Ford is also looking to build a US battery plant with China’s Contemporary Amperex Technology.
Building local battery plants is central to Ford’s efforts, but high energy prices in Europe have become a stumbling block. Swedish battery maker NorthVolt is reconsidering plans to add a German factory, and Tesla is reportedly delaying battery-making efforts at its plant outside Berlin.
In an earlier response to Bloomberg News, SK On said it had not decided whether to stop negotiations with Ford on setting up the joint venture in Turkey.
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