South Korea’s SK Innovation said on Tuesday that it will partner with Ford Motor to invest $11.4bn to build battery production plants and electric vehicle (EV) assembly plants in the US.
SK Innovation and Ford will make the multi-billion-dollar investment through a joint venture (JV) named BlueOvalSK, and Ford’s $7bn contribution will be its biggest investment in the company's 118-year history.
“This is our moment – our biggest investment in decades – to help build a better future for America,” said Ford president and chief executive Jim Farley. “We are moving now to deliver breakthrough electric vehicles for the many rather than the few.”
Battery plants in Tennessee and Kentucky
SK Innovation said it will contribute $4.45bn to the construction of BlueOvalSK plants, an amount equivalent to its 50% stake in the JV.
The South Korean battery manufacturer added that it plans to invest up to $6.4bn in the BlueOvalSK battery plant by 2027.
The BlueOvalSK battery plants will be located in Tennessee and Kentucky and is expected to have a combined annual production capacity of 129 kilowatts an hour.
Production to begin in 2025
Ford in a separate press release said the investment will create 11,00 new jobs in Tennessee and Kentucky and the production of new EVs and advanced lithium-ion batteries will begin in 2025.
The Michigan-based automaker said the investment comes amid strong demand for its new Ford F-150 Lightning truck, E-Transit and Mustang Mach-E electric vehicles.
Ford added that it expects 40% to 50% of its global vehicle volume to be fully electric by 2030.
Largest investment yet for SK Innovation
On Tuesday, shares in SK Innovation rose 3.8% to KRW261,000.
The company said its investment with Ford is its largest single investment in its history. SK Innovation added that upcoming plants in Tennessee and Kentucky along with its two existing plants in Georgia will enable it to produce 150 gigawatts an hour (GWh) annually in US alone.
SK Innovation said the latest investment will allow it to exceed goal of securing 200GWh production capacity per year globally by 2025.
"America’s transition to electric vehicles"
“This is a transformative moment where Ford will lead America’s transition to electric vehicles and usher in a new era of clean, carbon neutral manufacturing,” Ford executive chair Bill Ford said.
“SK Innovation to become the largest battery maker in the U.S. after securing Ford’s supply, one step closer to be among the global top positions,” SK Innovation said.