South Korean battery maker SK Innovation and American automaker Ford Motor are set to announce a battery joint venture in the United States to ensure a stable supply of batteries for electric vehicles, industry sources said on Thursday.
The two companies plan to announce a memorandum of understanding on the joint venture later in the day, as South Korean President Moon Jae-in meets with U.S. President Joe Biden in Washington this week to discuss bilateral issues, including EV industry cooperation, sources familiar with the matter told Yonhap news agency.
SK Innovation, a refinery-and-battery unit under South Korea’s No. 3 conglomerate SK Group, has been building a $2.6 billion battery factory in Georgia, which will supply batteries for Ford’s F-150 EVs.
The joint venture deal comes after SK Innovation last month agreed to pay $1.8 billion to its bigger home rival LG Energy Solution to settle a battery trade secret case, which had clouded its EV battery business in the US.
The settlement averted the worst-case scenario for SK, which would have had to abandon its Georgia factory if the 10-year import ban took effect, weighing on the Biden administration’s EV push.
The SK-Ford partnership is expected to be similar to what LG Energy has with another American automaker, General Motors, with the two jointly building battery factories in Ohio and Tennessee.
SK Innovation aims to expand its global battery production capacity to 85 GWh in 2023 and over 125 GWh by 2025, which can power about 1.8 million EVs, and Ford announced a $22 billion investment plan through 2025 to speed up its EV transition.
The JV battery deal is expected to spice up the upcoming bilateral summit as Biden has made boosting EVs a top priority for his $2 trillion infrastructure plan.
Biden pitched his $174 billion EV proposal during his visit to Ford’s EV plant in Michigan earlier this week, and Moon plans to stop over at SK Innovation’s Georgia plant on his way back home.