SK On and Ford Motor have signed a MoU for establishing a JV for battery production in Turkey.

14 March 2022, 04:47:46

SK On and Ford Motor have signed a MoU for establishing a JV for battery production in Turkey.SK On and Ford Motor have signed a MoU for establishing a JV for battery production in Turkey working together with Koç Holding. Founded in 1926, Turkey's Koç Holding is the only Turkish company to be listed on the Fortune Global 500, representing this country. In 1959, they established Ford Otosan together with Ford and are producing commercial vehicles (for business, such as vans, etc.) in the Cocaeli area, with an annual production capacity of 455,000 units.

Koç Holding, which participated as a partner with SK On-Ford, is evaluated as the best partner for the establishment of the European joint venture, as it has a strong influence in Turkey, such as operating various core businesses such as energy, automobiles, and durable consumer goods. The number of employees reached 110,000, and in 2021, it recorded 346.7 billion lira (about 29 trillion won) in consolidated sales.

The battery production plant will be located near Ankara, Turkey. The plant will produce high nickel NCM (nickel, cobalt, manganese) batteries, and production will start at the earliest from 2025 at an annual capacity of 30 to 45-gigawatt hours (GWh). The produced batteries are expected to be mainly used in commercial vehicles. Among the three major domestic battery companies, SK On is the first to establish a production joint venture in Europe in partnership with a carmaker.

SK On is firmly established as a key partner in Ford's electric vehicle battery supply. In particular, as Ford recently announced that it would operate a separate electric vehicle business, spurring electrification, expectations for collaboration with SK On are also rising.

Ford has a plan to secure a battery capacity of 240GWh by 2030, and most of it will be procured through SK On. Ford secured 140GWh needed in North America through BlueOval SK, a 129GWh joint venture established with SK On in Kentucky and Tennessee, USA, and SK On's second plant in Georgia (11GWh).

Ford plans to procure the remaining 100GWh in Europe and China, and this time, by procuring 30~45GWh through a Turkish plant jointly with SK On-Coach, more than 70% of the total capacity (240GWh) it wants to secure worldwide (170~ 185GWh) is expected to be achieved.

In addition to a joint venture through external partnerships, SK On is accelerating its securing of a global battery production base by building its own production plant. SK On operates factories in Korea (Seosan), the United States (Georgia), China (Changzhou, etc.) and Hungary (Komarom).

SK On aims to grow into a global battery company in name and reality by achieving the total production capacity of the joint venture and independent production subsidiaries to 220 GWh in 2025 and 500 GWh in 2030. In an interview with an in-house channel recently, SK On CEO Ji Dong-seop revealed his ambition to become the global No. 1 company, saying, "SK On has achieved 1,600 GWh of accumulated orders by the end of 2021, and customers have been constantly requesting increase."

Through this joint venture in Turkey, Ford is expected to further solidify its position in the European market as well as the US. In 2021, Ford was named Europe's best-selling commercial vehicle brand for the seventh consecutive year, and the Ford Transit Custom took the top spot in sales in the UK in 2020 with over 40,000 units sold.

"This joint venture initiative is a prime example of how we are leveraging strategic partnerships to strengthen our business," said Stuart Rowley, Ford Europe Chairman. "It is also the first in a number of significant electrification and commercial vehicle announcements we will make this year as part of the ongoing redesign of our operations to create a leaner, stronger and sustainable all-electric Ford business in Europe."

Koç Holding CEO Levent Çakıroğlu said, "We are very pleased to announce the signing of an MOU to consider a joint venture at an important stage in the future of the automotive industry, which is transitioning to the era of electric vehicles. This means that Turkey has significant global competitiveness in battery production." He also said, "The Coach Group’s long history and leading position in the automotive industry, Ford’s trust and dedication, and SK Innovation’s deep-rooted experience make this project convincing."

SK Innovation (the parent company of SK On) started researching electric vehicle batteries in 1991 and is evaluated to be the most advanced in high-density nickel NCM battery technology that has the greatest impact on electric vehicle mileage and output. In 2016, SK Innovation developed the world's first NCM811 battery using a cathode material mixed with nickel-cobalt-manganese in a ratio of 8:1:1, respectively. It has also succeeded in developing an NCM9 (about 90% nickel) battery and will supply it for the Ford F-150 Lightning vehicle.

Dong-seop Ji, CEO of SK On said, "I am delighted to continue the partnership in Europe following the cooperation through Blue Oval SK, a joint venture for battery production in the US with Ford." Then, CEO Ji emphasized, "I look forward to contributing to Ford’s electrification growth strategy and further contributing to the growth of the electric vehicle industry and reduction of global carbon."

"We have a vision to become the industry's best joint venture that will take the manufacturing and supply of electric vehicle batteries to the next level," said Ford European Chairman Stuart Raleigh. "I would also like to thank the Turkish government for continuing to support our transition to establish it. I want to thank our partners SK On Co., Ltd. and Koç Holding for their vision in what I believe will be an industry- leading joint venture which will take the manufacture and supply of batteries for electric commercial vehicles to the next level. I also thank the Turkish Government for continuing to support our electrification transformation."

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2022 Audi e-tron S Sportback quattro

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Length: 193.0 in / 4902 mm
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2022 Audi e-tron S quattro

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Doors: 5, Seats: 5
Length: 193.0 in / 4902 mm
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2021 Audi e-tron S Sportback quattro

2021 Audi e-tron S Sportback quattro

Doors: 5, Seats: 5
Length: 193.0 in / 4902 mm
Height: 63.6 in / 1615 mm
Curb weight: 5941.46 lb / 2695 kg
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2021 Audi e-tron S quattro

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Doors: 5, Seats: 5
Length: 193.0 in / 4902 mm
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2022 Audi Q4 Sportback e-tron 50 quattro

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2022 Audi Q4 Sportback e-tron 50 quattro

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