SK Inno-Ford to Invest 6 Trillion Won to Establish Battery JV 'BlueOvalSK'

Planned Production of 60 Giga-scale Battery Cells and Modules in the US

[Asia Economy Reporter Hwang Yoon-joo] SK Innovation and Ford have decided to invest approximately 6 trillion KRW to produce electric vehicle battery cells and modules with an annual capacity of 60GWh in the United States.

On the 20th (local time), SK Innovation announced that it had signed a memorandum of understanding (MOU) to establish a joint venture (JV) for electric vehicle battery production called 'BlueOvalSK.' The two companies plan to produce electric vehicle batteries with an annual capacity of about 60GWh in the U.S. starting from the mid-2020s through the joint venture, with further production expansion to be reviewed.

The joint venture name ‘BlueOvalSK’ combines Ford’s blue oval emblem, Blue Oval, and SK Innovation’s SK. The annual production capacity of 60GWh by BlueOvalSK is enough to produce 600,000 electric pickup trucks, each requiring approximately 100kWh batteries.

The joint venture plans to invest a total of about 6 trillion KRW to produce batteries with an annual capacity of 60GWh. Accordingly, SK Innovation intends to continuously expand its investment, considering market growth, in addition to the 6 trillion KRW invested by the joint venture and the 3 trillion KRW for the Georgia plants 1 and 2 currently under construction, totaling 9 trillion KRW in direct and indirect investments.

Kim Jun, President of SK Innovation, said, "Ford, a global automotive company representing the U.S., is one of the most proactive companies in pursuing electrification strategies, and we are very pleased to cooperate with Ford." He added, "The establishment of this joint venture between SK Innovation and Ford will play a key role beyond their cooperation, contributing to the U.S. government's strong push to build and grow the electric vehicle industry value chain."

Jim Farley, President and CEO of Ford, said, "Through this business agreement with SK Innovation, we have laid the foundation to vertically integrate important core elements that will differentiate us in the future," and added, "We will not yield Ford’s future to anyone else."

The battery cells and modules produced by the joint venture will be installed in many of Ford’s upcoming pure electric vehicle models. Going forward, the two companies plan to proceed with all necessary procedures, including finalizing agreements and obtaining permits required for establishing the joint venture.

Ford has stated that to smoothly advance its global pure electric vehicle plans, at least 240GWh of battery cell capacity must be secured by 2030. This corresponds to the combined production capacity of about 10 plants. Approximately 140GWh of this capacity will be required in the U.S., with the remaining capacity utilized in other key regions such as Europe and China.

◆ Global Top Growth Goal... Accelerating Global Expansion through Joint Ventures with Partners = Since 2017, when the electric vehicle and battery industries began to grow in earnest, SK Innovation has actively expanded its facilities and currently holds a global production capacity of 40GWh as of 2021. SK Innovation had set a goal to secure over 125GWh of production capacity by 2025, but with this joint venture, it is expected to reach as much as 190GWh. Furthermore, this strengthens its role in the North American electric vehicle ecosystem and brings it closer to becoming a global top-tier battery manufacturer.

SK Innovation is already constructing plants 1 and 2 in Georgia with a combined capacity of 22GWh. The approximately 10GWh plant 1 completed mechanical construction earlier this year and is currently undergoing commissioning, with commercial production scheduled to begin in the second half of this year. This plant is the largest single plant currently operating in the U.S. for large batteries used in electric vehicles.

Plant 2, with a capacity of about 12GWh, is currently under construction and is planned to be completed early next year for mass production in 2023. Batteries produced at the Georgia plants will be supplied to Ford’s F-150 pure electric vehicle. When combined with the 60GWh annual production capacity of BlueOvalSK created through this joint venture, the total battery supply to Ford in the U.S. will reach approximately 70GWh annually.

SK Innovation also announced earlier this year an additional battery plant investment plan of 30GWh in Ivancsa, Hungary, to expand battery supply in the European market.

SK Innovation has identified the trend of global automakers internalizing battery production as a new business opportunity and plans to actively respond to firmly achieve its goal of becoming a global top 3 battery manufacturer. SK Innovation stated, "The establishment of the joint venture with Ford was conducted from this perspective," and added, "Similar cooperation cases will continue to emerge in the future."

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