JV to Bring More of Ford’s EV Supply Chain In-House

Ford and South Korea-based SK Innovation sign of a memorandum of understanding that will create a partnership to manufacture electric vehicle batteries.

The joint venture is just the latest step in a series of EV- and battery-related investments Ford has made, both in itself and in outside companies.

Ford and SK Innovation’s JV, called BlueOvalSK, targets annual battery production of 60 GWh annually by 2025, which is enough capacity for about 600,000 vehicles.

With the Mustang Mach-E Ford was satisfied with buying batteries from suppliers, as the volume and adoption rates made that the most efficient option. Now, with the F-150 Lightning and increased EV adoption, investment is seen as critical to ensuring supply.

Ford says the partnership will go beyond simply an increase in production capacity, however. The automaker believes joint research will improve battery chemistry, increase energy density and reduce costs over time. BlueOvalSK also brings more of the EV supply chain in-house for Ford, known as vertical integration, which will mean the company will have control over not only the vehicles and drivetrain components, but also battery production and raw materials acquisition and development.

Creation of the SK partnership follows a Ford announcement in April in which the automaker laid out plans for a battery technology center in Michigan. The company also is partnering with BMW on an investment in Solid Power, a startup focused on developing solid-state batteries.

SK Innovation operates one U.S. factory and is building another in in Georgia. Another plant is in the works in Tennessee, where SK will produce components for Volkswagen.  

Ford and SK Innovation have been connected since 2013, and in 2018 Ford selected SK as the battery supplier for the all-new F-150 Lightning. SK recently settled a lawsuit with LG Energy Solutions for $1.8 billion, ending a dispute over alleged theft of intellectual property that threatened to significantly disrupt SK’s Georgia operations.