SK On adding plant in Turkey in JV with Ford and Koc to raise capacity in Europe to 90GWh

SK On’s plan to secure global battery production bases. [Source: SK On Co.]

South Korea’s SK On Co., the standalone battery entity of SK Innovation, will jointly build a battery plant in Turkey with global automaker Ford Motor Co. and Turkey’s largest industrial conglomerate Koc Holding, a move that is expected to help it produce more than 90GWh batteries only in Europe by 2025.

SK On announced Monday it has signed a non-binding memorandum of understanding to set up a joint venture to produce EV batteries on a site near Ankara, the capital city of Turkey, with Ford and Koc Holding.

The three companies under the partnership plan to produce 30-45GWh high nickel-manganese-cobalt batteries from the plant as early as 2025, mostly to power commercial electric vehicles. Details about construction commencement date, investment scale and ratio have not been disclosed yet, but experts estimate a joint investment of above 3.5 trillion won ($2.8 billion), given that it costs up to 1 trillion won to build a 10GWh battery plant in general.

The partnership will likely bring about landscape changes in the global EV battery market. SK On now is working to ramp up battery output from Komarom and Ivancsa in Hungary to 17.5GWh and 30GWh, respectively. With the addition of the joint venture in Turkey, its total EV battery production capacity in Europe should surge to 92.6GWh by 2025.

With additional EV battery investments in Georgia, the U.S. and Yancheng, China, SK On also aims to increase its production capacity from current 40GWh to 220GWh by 2025 and 500GWh by 2030.

“We will achieve successful joint ventures with great partners in Europe as well as in the United States,” said Jee Dong-seob, CEO of SK On.

(Left) Ford’s F-150 equipped with SK battery NCM9 / (Right) NCM9 battery displayed inside SK Innovation’s booth at Interbattery 2021. [Source: SK On Co.]

Koc Holding, founded in 1926, is Ford’s key partner that put its name as the only Turkish company on the Fortune Global 500. Koc Holding and Ford established Ford Otosan, which rolls out 450,000 commercial vehicles per year in Kocaeli Province.

The SK-Ford-Koc joint investment is expected to further strengthen the bilateral relationship. Ford recently announced its plan to run the EV business as an independent company under a plan to secure 240GWh batteries by 2030. Of the total output, about 70 percent is expected to be sourced from SK On – 129GWh through BlueOvalSK, SK-Ford U.S. JV; 11GWh from SK On’s Georgia second plant; and the remaining 30-45GWh from the new Turkish factory.

SK On by the first quarter commanded 5.6 percent in powering global EVs, No. 5 on the world rank and second to LG Energy Solution with 20.3 percent from Korea. Through aggressive expansion, the latecomer among three Korean battery majors is expected to closely chase LG Energy Solution which envisions global capacity of 400GWh by 2025.

SK Innovation shares were trading 0.26 percent higher at 196,000 won in Seoul at 10:29 a.m. Tuesday.

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