Ford Motor Co. and South Korean battery maker SK On Co. officially formed a joint venture this week to jointly operate electric vehicle battery factories in the United States, a move announced last year.
SK On and an SK On subsidiary called SK Battery America Inc. on Wednesday closed the formation of BlueOvalSK, LLC, a joint venture that will build and operate one EV battery plant in Tennessee and two in Kentucky, according to a regulatory filing. The joint venture will supply batteries for electric vehicles to Ford “and its subsidiaries”.
Ford and SK Battery America own equal shares in the joint venture, which will be a consolidated subsidiary of SK On.
Ford has agreed to contribute up to $6.6 billion in capital to the joint venture over a five-year period ending in 2026, according to the filing.
In May 2021, Ford and SK announced that they had signed a memorandum of understanding to establish a joint venture to build batteries.
Then, in September, the companies unveiled plans to invest $11.4 billion and create 11,000 jobs to build electric vehicles and battery packs at new campuses in Tennessee and Kentucky.
BlueOvalSK is expected to produce 60 gigawatt hours per year in traction battery cells and grid modules in North America, starting mid-decade, with potential for expansion, the companies said.
A major question that hangs over the creation of the joint venture and its battery factories – as well as other joint ventures between automakers and battery manufacturers currently forming in the United States – is whether workers will be represented there by United Auto Workers. Organizing electric vehicle and battery plant workers has become a top priority for the Detroit-based union.
The official creation of the joint venture between Ford and SK comes as U.S. automakers increasingly seek to localize, and in some cases bring in-house, production of key components for electric vehicles as the industry advances. on the road to electrification.
Ford is investing $50 billion in electrification through 2026, when it targets an annual EV production capacity of 2 million units worldwide.