Dane Hardware (right), Ford Design and Release Engineer, and Mary Fredrick, Ford Battery Validation Engineer, measure the voltage of a battery with a digital multimeter at the Ford Benchmarking and Testing Laboratory in Allen Park, Michigan.
DETROIT – Ford engine plans to set up a joint venture with the South Korean battery manufacturer SK Innovation, which will eventually manufacture battery cells for electric vehicles in the USA.
The companies announced Thursday that they had signed a memorandum of understanding for a joint venture called BlueOvalSK. The production of the battery cells and the supporting modules is to begin in the middle of the decade.
The announcement comes amid an expected spike in electric vehicle sales as well as a push from the Biden administration Increase domestic production of critical electric vehicle technologies such as battery cells that power the vehicles.
“As the industry changes, we now have to insource,” Ford CEO Jim Farley told reporters on Wednesday evening when the automaker was introduced new electric F-150 Lightning pickup.
Delivery and production of battery cells are critical to automakers Panning to electric vehicles. Farley compared it to automakers who built their own engines and powertrain components in the early 20th century. He said it will help avoid possible future bottlenecks like in the industry Currently experience with semiconductor chips.
Ford expects to produce up to 140 gigawatt hours (GWh) of energy for battery cells annually in North America and up to 240 GWh worldwide by 2030.
In the US, companies are planning to initially produce up to 60 GWh per year. That would be enough power for about 600,000 electric Mustang Mach-E crossovers from the automaker, Hau Thai-Tang, Ford’s lead product platform and operations manager, told the media on a call Thursday.
The establishment of the joint venture that was first reported Reuters Wednesday is subject to final agreements, regulatory approvals and other terms.
In May, CNBC reported first Ford expects to sell enough electric vehicles to start manufacturing its own battery cells by 2025.
Until Farley, Ford did not plan to manufacture its own battery cells took the helm on October 1st. He changed the course of his predecessor Jim Hackett, who had said the automaker saw “no advantage” in the production of battery cells.
Ford’s greatest rival in Crosstown General Motors, is years ahead of its EV battery plans that were recently announced its second Ultium facility, valued at $ 2.3 billion in the USA for the production of battery cells by a Joint venture with LG Chem. The two companies are already building an Ultium Cell facility in Lordstown, Ohio, due for completion in 2022.
Both GM plants in the US are expected to come on stream before Ford goes into production.