LG Energy Solution to Develop Up to 45GWh Battery Plant in Turkey with Ford and Coach

3-Party MOU Signed on 22nd, Mass Production in 2026
LG Energy Solution and Europe's No.1 Commercial Vehicle Company Ford
Aim to Expand Market Dominance in Europe

Ford's electric commercial vehicle 'E-Transit'. Photo by Ford Official Website

[Asia Economy Reporter Jeong Dong-hoon] LG Energy Solution announced on the 22nd that it has signed a memorandum of understanding (MOU) to establish a joint venture for electric vehicle battery production with American automaker Ford and Turkey's largest company Koc Holding.

The three companies plan to build a battery factory with a capacity of approximately 25GWh in the Baskent area near Ankara, Turkey, aiming for mass production in 2026. They have agreed to discuss expanding the production capacity of the plant to 45GWh in the future. Initially, SK On, Ford, and Koc were pursuing this project, but investment discussions stalled due to the economic downturn, leading to the official termination of the MOU by mutual consent earlier this month.

The batteries produced through the joint venture will primarily be installed in commercial vehicles, where Ford holds market leadership in the European and North American markets. Ford and Koc have established the joint venture 'Ford Otosan' in Turkey, producing about 450,000 commercial vehicles annually, with a significant portion sold in the European market.

The Koc Group is a leading Turkish company engaged in various businesses including automotive, energy, durable consumer goods, finance, food, retail, tourism, and IT. Since 1959, it has been producing vehicles through 'Ford Otosan' established with Ford, accounting for 45% of Turkey's automobile production and 41% of exports.

LG Energy Solution Expands Market Dominance with Ford, Europe's No.1 Commercial Vehicle Company

LG Energy Solution explained the background of the joint venture establishment as "a result of aligned interests between LG Energy Solution, which aims to firmly secure leadership in the rapidly growing European electric commercial vehicle market, and Ford, which seeks to procure high-quality and high-performance batteries."

LG Energy Solution currently has an annual production capacity of 200GWh, one of the world's highest levels, and has established production lines in six countries worldwide through both independent and joint ventures. It possesses differentiated global production capabilities and product competitiveness. As of the end of last year, LG Energy Solution's order backlog reached 385 trillion KRW.

Ford has been a traditional strong player in the commercial vehicle market, holding the title of 'the brand with the most vehicles sold in the European commercial vehicle market' for eight consecutive years until last year.

Ford's representative model, the Transit, has been the global best-selling LCV (Light Commercial Vehicle, such as minibuses and vans) for five consecutive years from 2018 to 2022. It sells about 270,000 units annually in the European market alone (as of 2021). The electrified model (E-Transit), which will be equipped with LG Energy Solution's batteries, is also expected to see strong market demand.

Ford aims to produce more than 2 million electric vehicles worldwide by 2026 and announced its electrification strategy named 'Ford+' last year, pledging to invest over $30 billion (approximately 39 trillion KRW) by 2030 to increase the proportion of electrified vehicles in new car sales to 40%.

An LG Energy Solution official said, "We expect LG Energy Solution's market leadership in the European market to be further solidified through this joint venture establishment," adding, "Ford will also expand its partnership with LG Energy Solution, whose quality and production capabilities have been verified, enhancing the 'battery supply stability,' a crucial element of the electrification transition plan."

Kwon Young-soo, Vice Chairman of LG Energy Solution. Photo by LG Energy Solution

LG Energy Solution and Ford to Strengthen Over a Decade-Long Partnership

LG Energy Solution began supplying electric vehicle batteries to Ford in 2011 and has steadily increased the supply volume every year.

In July last year, due to the increased sales of Ford's popular electric vehicle models Mustang Mach-E and electric commercial vehicle E-Transit, LG Energy Solution announced it would double the size of the Ford battery production line at its Poland plant and continue to expand it sequentially.

Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution, said, "LG Energy Solution's unparalleled global production experience, investment capabilities, and differentiated product competitiveness have been the key to maintaining a long-standing partnership with Ford," adding, "Going forward, we will further strengthen our leading customer value capabilities and accelerate the electric vehicle transition in Europe together with Ford and Koc, solidifying cooperation for a sustainable future."

Lisa Drake, Vice President of Ford EV Industrialization, said, "Ford is continuously strengthening its electric vehicle transition plans to lead the future electric vehicle revolution and is faithfully fulfilling its promise to produce batteries near its electric vehicle production bases," adding, "Together with LG Energy Solution and Koc, we will establish a solid production foundation and build the future of the growing European electric vehicle market."

Koc stated, "We believe this large-scale investment will play a significant role in overcoming the period of national disaster," and added, "We will expand investment facilities with these two global companies to enable Turkey to gain a global competitive edge in the automotive industry."

Meanwhile, LG Energy Solution plans to increase its global production capacity to 300GWh this year through active global capacity expansion in North America, Europe, and Asia, focusing on four core tasks: ▲differentiating product competitiveness ▲implementing smart factories ▲establishing SCM (supply chain management) systems ▲preparing for the future, to provide differentiated customer value.

To this end, it aims to increase facility investment by more than 50% compared to last year and boost annual sales by 25-30% or more.

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