Ford and SK Innovation to announce EV battery joint venture

People familiar with the matter say that Ford Motor Co and South Korean battery maker SK Innovation are set to launch a battery joint venture in the United States.

The joint venture would support the ramp-up of Ford’s electric vehicle rollout.

A memorandum of understanding about the joint venture will be announced on Thursday.

The deal may eventually include a jointly owned plant to make battery cells for use in rechargeable EV batteries.

Talks around the joint venture picked up speed last month after SK Innovation agreed to pay $1.8 billion to LG Energy Solution, a wholly owned subsidiary of LG Chem Ltd, to settle LG’s accusations of trade theft by its rival.

The dispute, which the administration of U.S. President Joe Biden had been on the verge of settling with a ruling, had put SK Innovation’s battery cell plant in Georgia at risk. That plant, which is under construction, will serve Ford and Germany’s Volkswagen AG.

The Ford-SK joint venture will highlight close U.S. and South Korean ties on EVs, a key priority for Biden.

SK Innovation is expected to complete the Georgia plant’s construction later this year, and is building a second facility next door that is expected to start battery production in 2023. The company has invested $2.6 billion in Georgia.

A deal with SK may have Ford taking a similar path as rival General Motors Co, which has a battery joint venture with LG Energy that is building plants in Ohio and Tennessee.

The status of these battery plants is key to the United Auto Workers union, which represents GM and Ford’s U.S. hourly plant workers. The union has pressed the automakers to allow workers at these plants to unionize, an approach Biden has backed.

Ford is pushing to electrify key models in its lineup, including the Transit van late this year and F-150 pickup mid-2022, and already sells the all-electric Mustang Mach-E SUV. It has said it will invest $22 billion in electrification through 2025.