Ford will partner with LG Energy Solution to build a new battery plant in Turkey, dropping a deal with SK On, as the automaker seeks to speed up the shift to clean cars and diversify its battery suppliers, people familiar with the matter said.
Ford and LG Energy Solution plan to sign a memorandum of understanding within the coming weeks, probably in late January or early February, according to two people with knowledge of the matter who asked not to be named because the change in partners is not public.
Ford will continue to work with SK Innovation’s battery unit, SK On, on other projects, including building two factories in the U.S. and increasing capacity at a plant in Hungary, part of a push to make 2 million electric vehicles annually by the end of 2026.
The facility in Turkey is slated to start operation as soon as 2025 with an annual capacity of 30 to 45 gigawatt hours, according to an initial accord from March last year between Ford, SK On and Turkish conglomerate Koc Holding.
Previous media reports said Ford had scrapped its plan for the plant in Turkey, not that the company was changing partners.
A spokesman for Ford said the battery project is on track. LG Energy Solution declined to comment.
Ford CEO Jim Farley has committed $50 billion to developing and manufacturing electric vehicles.
The automaker is accelerating EV and battery production, including its first all-new assembly plant in a half century alongside a new SK battery plant in Tennessee.
SK makes batteries for Ford's electric F-150 Lightning pickup produced in Michigan, while LG supplies the batteries that power the Mustang Mach-E the automaker manufacturers in Mexico.
Ford is also looking to build a U.S. battery plant with China's Contemporary Amperex Technology Co.
Building local battery plants is central to Ford's efforts, but high energy prices in Europe have become a stumbling block.
Swedish battery maker NorthVolt is reconsidering plans to add a German factory, and Tesla is reportedly delaying battery-making efforts at its plant outside Berlin.
In an earlier response to Bloomberg News, SK On said it hadn’t decided whether to stop negotiations with Ford on setting up the joint venture in Turkey.
Ford plans to build a new version of its Transit Custom van for the European market in Turkey in 2023 including full-electric and hybrid variants along with the combustion-engined version.
The Turkey battery plant is planned to be located near the Turkish capital, Ankara, and would be one of the largest EV battery facilities in Europe and Turkey.
Reuters contributed to this report
