Ford says plan for EV battery plant in Turkey with SK On still on track

Ford F-150 Lightning truck that is equipped with SK On's batteries [FORD]

SK On and Ford Motor’s plans for a joint electric vehicle (EV) battery plant in Turkey are still on track.

“The non-binding MOU [memorandum of understanding] signed between Ford, Koc and SK On is currently in force and our plans for a battery production site in Turkey are on track,” a Ford spokesperson said in an email interview with the JoongAng Ilbo.

This comes a few weeks after Bloomberg and local media reported that discussions appear to have fallen through, and Ford is in talks with LG Energy Solution instead.

Ford dropped the deal with SK On as the U.S. carmaker seeks to speed up its shift to clean cars and diversify its battery suppliers, according to the Bloomberg report.

SK On denied the reports, adding that it is "currently in discussions with Ford regarding possible cooperation."

In March last year, SK On signed an MOU with Ford and Istanbul-based Koc Holding to establish a joint venture for an EV battery manufacturing plant in Turkey.

The initial plan was to build a lithium-ion battery production plant in Ankara, a city southeast of Istanbul and the capital of the country, with an annual capacity of 30 to 45 gigawatt-hours. That is the equivalent to making more than 400,000 EVs annually.

Ford has a car manufacturing plant in Turkey.

SK On's low battery yield rate was reported as the other big reason behind Ford backing out. The rate at SK On's Georgia plant is estimated at about 80 percent, while rivals LG Energy Solution and Samsung SDI stand at about 90 percent. This means two out of 10 battery products made at the plant are rejected, defective or otherwise discarded.

"We acknowledge that the rate was not that good until the beginning of 2021," said Jeong Jun-yong, the chief executive of SK battery America, during a press conference in Georgia earlier in the month.

"But it has gotten better and improved to a predictable level."

SK On is Ford's sole battery partner. The two companies are currently constructing two plants in Kentucky and one in Tennessee.

Ford is making efforts to diversify its suppliers amid the fast-growing EV market.

Ford is in talks with China's Contemporary Amperex Technology (CATL) to build a battery plant in the United States. They were about to build one in Virginia, but the plan was scrapped as the local government refused to grant permission.

The two companies agreed on a joint venture, with Ford owning 100 percent of the plant and CATL only operating it.

BY KANG KI-HEON, SARAH CHEA [chea.sarah@joongang.co.kr]