Ford and SK Innovation officially announced they have signed a memorandum of understanding (MoU) to form a joint venture to manufacture battery cells and array modules in the U.S. The deal was rumored by Reuters.

The new company, to be named BlueOvalSK (a combination of Ford’s Blue Oval emblem and SK in SK Innovation’s name), is expected to produce 60 GWh of battery cells and modules annually ("with potential to expand"), starting mid-decade.

SK Innovation's press release explains that 60 GWh is enough to "power about 600,000 electric pickup trucks (each requires about 100 kWh of battery)", although we would treat it only as a brief example (pickups might require much more than 100 kWh per pack).

The investment in BlueOvalSK will be about 6 trillion KRW ($5.3 billion) according to SK Innovation:

"About 6 trillion KRW will be invested in this JV. Accordingly, along with the 3 trillion KRW investment in Plant 1 and Plant in Georgia, SK Innovation has announced a total of 9 trillion KRW in building battery facilities in the U.S. The company expects to increase this amount in consideration of the market expansion in the future."

Jim Farley, Ford president and CEO said:

"This MoU is just the start; it’s a key part of our plan to vertically integrate key capabilities that will differentiate Ford far into the future. We will not cede our future to anyone else.”

Kim Jun, SK Innovation CEO & President said:

“We are delighted to be entering into collaboration with Ford, America’s leading and iconic automaker. Ford is one of the most active players in vehicle electrification today. We are proud to be opening this new chapter in their long history. Our JV with Ford will play a pivotal role in fleshing out the electric vehicle value chain in the United States, a key objective of the current U.S. administration.”

Lisa Drake, Ford’s North America chief operating officer said:

“Through the JV, Ford and SKI will jointly develop and industrialize battery cells at scale that are tailored to deliver optimum performance and value for our Ford and Lincoln customers. SKI is an important partner in helping deliver batteries with better range and value for our fully electric vehicles by mid-decade.”

Ford expects that its global battery demand (by capacity) will reach 240 GWh annually by 2030 and up to 140 GWh will fall on North America. That alone suggests that a single JV will not be enough and we will hear about at least one more in the U.S. in a few years.

"Ford’s global BEV plan calls for at least 240 gigawatt hours (GWh) of battery cell capacity by 2030 – roughly 10 plants’ worth of capacity. Approximately 140 GWh will be required in North America, with the balance dedicated to other key regions, including Europe and China."

Ford is quite serious about electric vehicles right now. The plan is to invest at least $22 billion in this segment by 2025. The company also invests (since 2019) in Solid Power start-up, that develops next-generation solid-state batteries (both Ford and BMW have an equal stake in Solid Power).

Other battery-related projects are:

  • Ford Ion Park - a new global battery center of excellence to accelerate its battery and battery cell technology R&D – including future battery manufacturing (underway)
  • a $185 million collaborative learning lab in Southeast Michigan that is dedicated to developing, testing and building vehicle battery cells and cell arrays (to open late 2022)
2022 Ford F-150 Lightning Side View
2022 Ford F-150 Lightning
Ford E-Transit
Ford E-Transit

SK Innovation expansion

SK Innovation is the primary battery supplier for the recently unveiled Ford F-150 Lightning pickup, although cells for this model will be produced at SK's battery plants in Commerce, Georgia, in which the company invests 3 trillion KRW ($2.6 billion):

  • Plant 1: 9.8 GWh
    Currently "is running pilot production after the completion of mechanical construction earlier this year"
    Commercial production will begin in early 2022
  • Plant 2: 11.7 GWh scheduled for 2023
    Currently is under construction (planned to be completed in early 2022)
    Commercial production is expected to start in 2023
  • Total: 21.5 GWh

SK Innovation had to settle with LG Energy Solution in April to continue this investment (the company will pay $1.8 billion to LGSE).

The batteries for the Ford F-150 Lightning will be NCM 9½½:

"SK Innovation has specialized in the development and commercialization of high-nickel NCM battery technology. The company developed the world’s first NCM-811 battery in 2016 and continued to innovate and to develop the world’s first high-density “Nickel 9” battery (battery that has 90% nickel content) that will be mass produced in the U.S. powering Ford’s F-150 Lightning."

Globally, SK Innovation EV battery manufacturing capacity stands at 40 GWh annually (counting plants in South Korea, China, Hungary, and the U.S.).

The expansion plan to over 125 GWh annually by 2025, after including the BlueOvalSK, is now 190 GWh annually by 2025.

BlueOvalSKin brief:

  • joint venture between Ford and SK Innovation
  • MoU announced on May 20, 2021
  • production output: about 60 GWh of battery cells and modules annually
    (with potential to expand)
  • cell chemistry: probably “Nickel 9” (NCM battery that has 90% nickel content in cathode) as in SK's battery plants in Commerce, Georgia
  • expected production start: mid-decade
  • location: N/A
  • investment: about 6 trillion KRW ($5.3 billion)
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