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        home > news > Automakers > Ford, SK Innovation Partner for New Battery Venture

        Ford, SK Innovation Partner for New Battery Venture

        BlueOvalSK will use Georgia plant for production.

        Jim Stickford , Contributing Editor
        May 20, 2021

        The effort to develop and control battery development and production for EVs has heated up at Ford.

        The company announced at a special electronic media briefing on Thursday it signed a memorandum of understanding for a joint venture —BlueOvalSK — to manufacture battery cells and arrays in the U.S. with SK Innovation of South Korea.

        Ford and SK Innovation created a joint venture to produce approximately 60 GWh annually in traction battery cells and array modules, starting mid-decade, with potential to expand.

        This announcement came the day after Ford unveiled its new F-150 EV truck called the Lightning, and two days after President Joe Biden took a personal test drive of the Lightning at the company’s Dearborn, Michigan, test track.

        Established as South Korea’s first oil refining company in 1962, SK Innovation engages in diverse areas of business, including exploration and production, batteries, and information and electronics materials. 

        Part of electrification plan

        Lisa Drake, Ford’s chief operating officer – North America, began the briefing by saying new venture is part of a three-pronged effort by Ford to modernize its portfolio and improve the quality of its products and the driving experience for customers.

        The first part is to improve vehicle quality, the second is to modernize all of its facilities by embracing technology and the third is to “disrupt ourselves by creating new ventures and areas of competency” to maximize its readiness and position for the future.

        To that end, Ford has gone ahead with development of vehicles like the F-150 Lightning and the Mustang Mach-E. The company has also committed itself to spending about $22 billion on EV development and production through 2025.

        The joint venture is important for a couple of reasons, Drake said. By 2030, Ford expects annual energy demand for its vehicles will be up to 140 GWh annually in North America and up to 240 GWh globally.

        Ford is expanding its reach into battery development and production.

        Working with others

        The company has invested in and is working with a number of battery suppliers to secure capacity and scale delivery for next-generation Ford and Lincoln battery-electric vehicles.

        The BlueOvalSK deal builds on Ford’s recently announced investments to accelerate R&D of battery technology and manufacturing — including a new global battery center of excellence and an additional investment in a solid-state battery startup.

        Kim said that Ford and SK Innovation have been working together since 2013 and his company is thrilled play a major role in Ford’s plan to expand its EV offerings.

        He added the battery being developed with Ford will be nearly 90% nickel. This offers a couple of advantages. First the more nickel that can be used in a battery, the greater the energy density. That helps provide a higher range between recharges.

        Second, the mining of cobalt has not always been conducive to protecting human rights, Kim said.

        Ford battery development site Allen Park
        Ford is committed to its all-electric future with plans to create a new $185 million battery development lab.

        The batteries will be made in SK Innovation’s facility in the state of Georgia. The company is expected to open up new production facilities as demand for its product increases.

        Hau Thai-Tang, Ford’s chief product and operations officer, said as Ford ramps up production of its EV portfolio, the demand for batteries is only going to increase.

        By 2030 the company estimates that demand for EV power will reach the 140-GWh level. And that’s just for North America. Worldwide that figure is estimated to be closer to 240 GWh. That’s a lot of power and that will require a lot of batteries.

        Tapping the global supply chain

        So it makes sense for Ford to invest in supply chains around the world. The computer chip shortage that is currently affecting the automotive industry worldwide demonstrates the importance of controlling as much of the supply chain as possible.

        Which is why Ford is making such large investments in the vertical integration of its supply chain. Plus by working with SK Innovation, Ford can increase its knowledge of batteries and battery production. That’s important as the company ramps up its EV development and production.This deal is building on Ford’s recent efforts to develop EVs and the joint venture will work with Ford’s new Ion development and production facility. There are still a few details to finalize, including the corporate structure.

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        One response to “Ford, SK Innovation Partner for New Battery Venture”

        1. JAH says:
          May 22, 2021 at 8:23 am

          Paul, the byline states “BlueOvalSK will use Georgia plant for production.” but the article seems to indicate that the new company’s initial output will come from the new plant that is scheduled to be online by mid decade. Can you clarify which is correct? Thanks!

          Reply

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