Ford said to team up with LG Energy for battery plant in Turkey

[Photo by MK DB]

Ford Motor Co. will join hands with South Korean battery maker LG Energy Solution Ltd. (LGES) instead of SK on Co. to build a new battery plant in Turkey, according to Bloomberg on Monday.

Multiple sources told Bloomberg that U.S. auto giant Ford and LGES will sign a memorandum of understanding (MoU) in late January or early February on a joint battery factory in Turkey.

Ford had signed an MoU with SK on and Turkey-based Koc Holding AS in March last year to build a joint battery facility near Ankara, Turkey’s capital. Under the MoU, the companies were to begin commercial production from 2025 with an annual capacity of 30~45 gigawatt hours (GWh).

The companies discussed project details but have not yet have come to terms on investment due to sluggish economy and high interest rate environment that have strained global fund market. Ford is known to have made a proposal to LGES instead and the two are in discussion.

“No decision has been made yet with regard to establishing a factory with Ford,” said an unnamed official from LGES.

The Korean battery major has been strengthening partnership with Ford. LGES plans to double the production capacity of its battery line in Poland upon Ford’s request.

Ford plans to continue to work with SK on on the remaining projects besides Turkey. Ford and SK on are building new factories in the U.S. and are expanding facility in Hungary. SK on supplies batteries for Ford’s F-150 Lightning all-electric truck produced in Michigan while LGES for Mustang Mach manufactured in Mexico. It is also in talks with Chinese battery maker Contemporary Amperex Technology Co. (CATL) to build a battery plant in the U.S.

Shares of LGES were trading 2.26 percent higher at 474,500 won ($383) as of 1 p.m.