Ford Takes Massive Leap In The EV Race

Electric Vehicles / Comments

There won't be a battery shortage for the Ford F-150 Lightning, or any other EV.

The Ford F-150 Lightning may be stealing headlines right now, but Ford has made yet another massive stride as far as its EV plans are concerned. Ford and battery maker SK Innovation have signed a memo of understanding for a joint venture to produce batteries in the US. To be called BlueOvalSK, the venture will produce approximately 60 GWh annually to start with the potential to expand. This is all part of its $22 billion investment in green tech by 2025. Ford notes that "the creation of the JV is subject to definitive agreements, regulatory approvals and other conditions."

Ford expects to need 140 GWh of battery cell capacity by 2030 in North America alone and an additional 100 GWh for the rest of its global markets including Europe and China.

The Blue Oval says it wants to play to its strengths, targeting aspirational customers and commercial segments. It wants to amplify things its customers love, leverage its huge scale in the BEV market, and "develop an ecosystem that makes the transitions to BEV lifestyle easier for commercial and retail customers."

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SK Innovation and Ford have been collaborating since 2013., so a joint venture is naturally the next step. "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," said Lisa Drake, Ford's North America chief operating officer. "SKI is an important partner in helping deliver batteries with better range and value for our fully electric vehicles by mid-decade."

SKI already operates a plant in Georgia and hopes to become one of the world's top three battery producers by 2025 with more than 125 GWh of capacity. It specializes in the development of batteries that use nickel - an easier, safer, and less flammable component than lithium. It works better too, which is why the F-150 Lightning's batteries will use the element. "The higher the nickel content, the higher the density, which means more power and longer range," said Kim Jun, SK Innovation CEO and President.

Of SKI's supply of batteries for the Lightning, Jee Dong-seob, head of SK Innovation's battery business said, "We are thrilled to be supporting the electrification of a vehicle that represents the very best of American automaking."

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This announcement builds on previous news from the Blue Oval. Last month it said it would begin building its own battery cells, in addition to creating the Ford Ion Park battery lab, and a few weeks ago it increased its investment in Solid Power, a solid-state battery company looking to ease the transitions into the next generation of batteries. The important part of Solid Power's process is that factories like Ford can use 70 percent of its existing production tools.

Ford says the new deal with SKI will also help make its battery supply chain more ethical, which we know is an ongoing issue. To that end, it launched a Partnership for a Cleaner Environment (PACE) to reduce suppliers' environmental footprints and offer training in responsible business practices. Ford is also a member of the Electronic Industry Citizenship Coalition, a non-profit of tech companies dedicated to improving the social, environmental, and ethical conditions of the global supply chain. And finally, it is participating in a pilot program with Huayou Cobalt, IBM, LG, and RCS Global to create an industrywide network to trace and validate ethically sourced materials.

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A few years ago, when Ford was talking Mustang Mach-E, it said it was not going to build its own batteries. Since then, it has two more BEVs in production, and Hau Thai-Tang, chief product platform and operations officer for Ford, explained the change in strategy:

"We've always thought about this as where we are on the early adopter curve. With the Mustang we bought them, but when we move to early majority with the Lightning and E-Transit, we now have sufficient volume to justify the investment. It gives us the ability to secure supply that potentially could become constrained. It gives us the ability to gain expertise around chemistry process and value chain" and "work directly with the supply chain," Thai-Tang said.

Ford declined to comment on where the new plants would be and whether they will be unionized, but did confirm its first two plants, with 60 GWh of capacity, would be somewhere in North America.

"This memo 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," said Jim Farley, Ford president and CEO. "We will not cede our future to anyone else."

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