Hot off the heels of the public debut of the F-150 Lightning pickup truck, Ford announced that it will form a joint venture with South Korea’s SK Innovation to manufacture batteries for electric vehicles at scale.
The two companies signed a memorandum of understanding to create a joint venture called BlueOvalSK that would manufacture batteries in the US. Ford has a preexisting relationship with SK Innovation, which supplies batteries for its Mustang Mach-E SUVs.
But now the two companies will plan on making those batteries together. For months, Ford has sought to gain more control over its supply chain as the race to produce more EVs for the growing US market heats up.
SK Innovation recently lost a trade secret dispute with rival LG Chem that could hinder its imports to the US. (The companies recently reached an agreement that could avert a possible import ban.) By making its own batteries in the US, Ford can avoid some of the conflicts that arise from sourcing batteries overseas.
Last month, the company announced the creation of Ford Ion Park, a global battery center of excellence” based in southeast Michigan. Ford said the purpose is to conduct research on how to go about making its own electric vehicle batteries. A team of 150 experts will work on ways to build EV batteries that are long lasting, quick to charge, and sustainable for the environment.
Ford said that by 2030 it expects annual energy demand for its vehicles to be up to 140GWh annually in North America and up to 240GWh globally. Globally, battery production is expected to grow from 95.3GWh in 2020 to 410.5GWh in 2024, according to GlobalData, a data and analytics company.
Ford will have to move more aggressively if it hopes to catch up to its competitors like Tesla and General Motors — both of which are working rapidly to localize their battery development in the US. GM is building two battery factories with its partner LG Chem, while Tesla is in the early stages of making its own “tabless” battery cells in-house. Meanwhile, Volkswagen recently unveiled its own plan to build six “gigafactories” in Europe by 2030.