Ford Motor and SK Innovation to Form Joint Venture to Build Electric-Car Batteries in the U.S. -- 2nd Update
May 20 2021 - 11:01AM
Dow Jones News
By Ben Foldy
Ford Motor Co. has struck a deal with South Korean firm SK
Innovation Co. to form a joint venture to build electric-car
batteries in the U.S., the latest in the auto industry's efforts to
fortify supplies of this critical part ahead of the rollout of more
plug-in models.
The No. 2 U.S. auto maker by sales said Thursday it had entered
into a memorandum of understanding with the battery-making company
to establish the joint venture, which will be called BlueOvalSK.
The partnership aims to build batteries and related components in
the U.S. with the goal of producing approximately 60 gigawatt hours
annually by mid-decade, the two companies said.
Ford executives said the target output would likely lead the
joint venture to build two new battery plants in North America, but
details have yet to be completed and are expected to come later
this year. The venture and ownership structure are also still under
discussion and will be subject to regulatory approvals, the
executives said.
Ford shares were up 4.2% in trading Thursday morning.
SK Innovation is one of the world's largest battery producers
and Ford already has a supply relationship with the firm to make
batteries for some models, including its coming electric F-150
truck.
Ford, like many other major car companies, is investing billions
to develop more battery-powered models, a shift being spurred on by
tougher tailpipe-emissions regulations globally and more
governments setting target dates for phasing out the sale of
gasoline-engine vehicles.
Ford CEO Jim Farley said last month that the company intends to
get into the battery-making game with plans to develop its own
lithium-ion batteries for electric cars. Other legacy auto makers
are also taking a similar route, following the lead of electric-car
maker Tesla Inc. in making electric-vehicle components in house
rather than relying on outside suppliers.
Rival General Motors Co. is already building an electric-car
battery plant in Ohio through a joint venture with LG Chem Ltd.,
set to open next year. Earlier this year, the Detroit-based car
maker said it would construct a second $2.3 billion battery factory
in Tennessee through the partnership as it gets ready to introduce
more plug-in models.
As car companies look to expand their electric-model lineups,
the race to secure battery supplies is intensifying, as some
analysts raise concerns that the fast-growing demand will quickly
outstrip the existing manufacturing capacity.
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
May 20, 2021 10:46 ET (14:46 GMT)
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