US Ford to Invest 200 Billion Won to Independently Develop Electric Vehicle Batteries

Battery Development Center to Be Established in Southeast Michigan... Target Opening Next Year
WSJ: "Competitors GM and Volkswagen Follow Suit"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] American automaker Ford is investing about 200 billion KRW to independently develop electric vehicle batteries. This move appears to be an effort to gain market leadership amid the accelerating transition to electric vehicles.

According to the Wall Street Journal (WSJ) on the 27th (local time), Ford announced that it will invest $185 million (approximately 205.7 billion KRW) to build a battery development center in southeastern Michigan, USA, aiming to open it next year. The battery development center Ford is building will start with lithium-ion battery development and aims to produce its own battery cells.

WSJ analyzed, "This follows the moves of competitors such as General Motors (GM) and Germany's Volkswagen."

Recently, GM announced plans to build a second battery joint venture plant with LG Chem in Tennessee, following its plant in Ohio. Volkswagen plans to expand six battery factories in Europe by 2030 and produce battery cells with an annual capacity of 240 GWh independently.

The reason automakers including Ford are rushing to develop their own batteries is due to concerns that a supply shortage of batteries, a key component, may occur as the transition to electric vehicles accelerates. There are worries that a surge in electric vehicle demand could lead to a supply crisis for essential components like batteries. According to market research firm SNE Research, battery demand is expected to exceed supply by 7% starting in 2023.

There is also an interpretation that this is a strategic move to secure price competitiveness in the electric vehicle market. Batteries are the most expensive component, accounting for more than one-quarter of the total price of an electric vehicle, and it is reported that electric vehicle manufacturers view in-house battery production as essential to securing price competitiveness.

This content was produced with the assistance of AI translation services.