Ford Teams Up With LG for Turkish Battery Manufacturing Facility, Ditches SK

Ford Motor Co. will partner with LG Energy Solution Ltd. to build a new battery plant in Turkey, according to people familiar with the matter. This move drops Ford's previous deal with SK On Co. as the US carmaker seeks to speed up the shift to clean cars and diversify its battery suppliers.

Ford and LG Energy Solution are set to sign a memorandum of understanding in the coming weeks, according to sources familiar with the matter. The change in partners is not yet public.

U.S. carmaker Ford has announced that it will continue to work with SK Innovation's battery unit, SK On, on other projects. This includes building two factories in the US and increasing capacity at a plant in Hungary. This is part of Ford's push to make 2 million electric vehicles annually by the end of 2026. The facility in Turkey is slated to open as soon as 2025 with an annual capacity of 30 to 45 gigawatt hours. This is according to an initial accord from March last year between Ford, SK On and Turkish conglomerate Koc Holding.

Previous media reports said Ford had scrapped its plan for the plant in Turkey, not that the company was changing partners. A spokesman for Ford said the battery project is on track. LG Energy Solution declined to comment.

Shares of Ford were slightly higher in early trading, rising 0.3% to $12.61 as of 9:42 a.m. in New York. LG Energy Solution closed trading in Seoul with a gain of 4.5%.

Ford is investing $50 billion in electric vehicle development and manufacturing. The company is accelerating EV and battery production, including its first all-new assembly plant in 50 years. Ford is also partnering with SK and LG to produce batteries for its electric vehicles. The company is also looking to build a US battery plant with China’s Contemporary Amperex Technology Co.

Building local battery plants is central to Ford’s efforts, but high energy prices in Europe have become a stumbling block. Swedish battery maker NorthVolt AB is reconsidering plans to add a German factory, and Tesla Inc. is reportedly delaying battery-making efforts at its plant outside Berlin. This is a setback for Ford, as local battery production is key to its plans for electric vehicles. However, the company is still committed to its goal of becoming a leader in the EV market.

SK On said that it has not yet decided whether to stop negotiations with Ford on setting up a joint venture in Turkey.