US Electric Vehicle Market with Ample Growth Potential, Top 2 Automakers Both Allied with Korean Battery Companies

Korean Battery, Key Partner for US Electric Vehicles
European and Chinese Markets Reached 1.2 Million Units Last Year
US Market Remains at 300,000 Units for 2 Years
Indicates Greater Growth Potential in US Market

SK Battery America is building its second electric vehicle battery plant in Commerce, Georgia. The first plant on the right was completed earlier this year and is producing prototypes.

[Asia Economy Reporter Choi Dae-yeol] The decision to establish a joint venture (JV) between SK Innovation and Ford was made based on the judgment that securing battery supply will be crucial to enhancing competitiveness in the growing electric vehicle (EV) market. Following President Joe Biden's inauguration and the Green New Deal policy, the adoption of electric vehicles in the United States is expected to increase. Both SK and Ford appear to share the view that they must cooperate more closely to catch up with leading players in the global EV market. This also aligns with the policy direction of the U.S. administration aiming to become a major EV nation.

U.S. "The Future is Electric Vehicles"
Supporting Korean Batteries
Biden: "The Future of the Auto Industry is Electric Vehicles"

The United States is considered one of the world's three largest automobile markets alongside Europe and China, but it lags relatively behind in the EV sector. While Europe and China each sold over 1.2 million electric vehicles last year, the U.S. remained at just over 300,000 units for two consecutive years. This is due to several years of low oil prices and a market environment that traditionally favors larger vehicles.

However, this also means that the U.S. EV market has greater potential for growth. On the 18th (local time), President Biden, visiting Ford's EV factory, stated, "The future of the auto industry is electric vehicles," and warned, "We will not let them (China) win in the EV market," clearly expressing concern over China's advancing position in EV sales.

Since taking office, President Biden has pledged financial support to convert official vehicles and school buses to electric and to expand charging infrastructure. He has also ordered a review to ensure that the domestic battery supply chain is properly established. Batteries are considered a key component directly linked to the price and performance of electric vehicles. As the future trend of the automobile market shifts toward EVs, it is necessary to firmly establish the supply system. Korean, Chinese, and Japanese companies dominate the EV battery market, but China remains a potential source of trade disputes, and Japanese companies, except Panasonic, tend to be passive about expanding their scale.

Given the possibility of quality issues such as fires, a high level of technology is required, and with supply shortages expected to continue for several years, global automakers are in urgent need of cooperation with Korean battery companies. For Ford, which ranks second after General Motors (GM) in the traditional automobile market, there is currently no substantial EV sales model. Its announcement to invest $22 billion by 2025 to focus on electrification reflects a sense of urgency not to fall behind in the future automotive market.

U.S. President Joe Biden visited the Ford plant in Dearborn, Michigan, on the 18th (local time) and waved his hand while test-driving the soon-to-be-released new electric vehicle, the F-150 Lightning pickup truck. In his speech that day, President Biden said, "The future of the automotive industry is electric vehicles."

SK Building a Factory in Georgia
Additional Investment Possible After Ford JV
SK Based in U.S. South, JV Factory Possibly in Northeast?

For SK, which is building an EV battery factory in Georgia, USA, the establishment of this joint venture provides additional capacity for investment. SK has previously pledged to invest over $5 billion in its battery business in the U.S. SK's Georgia Plant 1 was completed earlier this year and is currently producing prototypes, with Plant 2 being constructed right next to it.

The company considered up to four plants when selecting the current factory site. If SK's four local plants in the U.S. are all established, it would be one of the largest scales globally. Once SK Georgia Plants 1 and 2 are in mass production, their combined annual capacity will slightly exceed 20 GWh. If Plants 3 and 4 are built at a similar scale, the total capacity is expected to reach around 45 GWh, enough for 700,000 electric vehicles. LG Energy Solution and General Motors' joint venture plants currently under construction have capacities of 35 GWh each, and Tesla's Nevada factory, the world's largest EV manufacturer, has a capacity of 20 GWh.

Based on the LG-GM case, it is expected that the two companies will invest similar amounts for the new battery factory. Neither Ford nor SK has disclosed specific plans yet, but the possibility of building additional battery production plants is high. Ford's U.S. automobile production bases are centered around Detroit in Michigan, as well as nearby Ohio, Illinois, Missouri, and Kentucky. Since these are mainly in the Northeast region, it is likely that the joint venture's battery factory will also be located nearby. Rather than simply supplying batteries, it is expected that they will focus on vertical integration through the joint venture to enhance the competitiveness of finished products.

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