LG Energy Solution, Ford, Koc plan joint battery venture in Turkey

LG Energy Solution's battery manufacturing plant in Poland [LG ENERGY SOLUTION]

LG Energy Solution is establishing a joint battery venture with Ford Motor and Koc Holding in Turkey.

The Korean battery maker said Wednesday the three companies signed a non-binding memorandum of understanding (MOU) to build an EV battery plant in Baskent, a city near the Turkish capital of Ankara.

The announcement comes about two weeks after Ford and Koc scrapped their plan with SK On, a wholly owned battery subsidiary of SK Innovation.

The factory will have an annual production capacity of 25 gigawatt hours, which will later be expanded to 45 gigawatt hours — enough to make 500,000 EVs.

The construction will start as early as the end of the year, with a goal of starting production in 2026.

The total investment size is reported to be around 3 to 4 trillion won ($2.3 to $3.1 billion), though LG Energy has yet to confirm the exact amount.

The produced batteries will be used in Ford's commercial vehicles including E-Transit vans. Ford is the No. 1 brand in the European commercial vehicle market.

Ford and Istanbul-based Koc run a car manufacturing facility in Turkey, with an annual production capacity of 450,000.

“Our long-time business relationship with Ford is the result of our commitment to deliver unmatched product competitiveness, stable yields, and global operational expertise, made possible by our extensive knowledge accumulated through pre-emptive investments in global markets,” said LG Energy Solution CEO Kwon Young-soo.

“Now joining forces with Ford and Koc in Turkey, we will bring in our leading battery technology to further boost the EV transition in Europe, thereby leading the global initiatives for a more sustainable future.”

LG Energy's relationship with the U.S. automaker first started in 2011 when it started supplying batteries for Focus Electric, Ford's first EV.

LG's batteries are currently used in Ford Mustang's Mach E SUVs and E-Transit vans. The Korean battery maker recently doubled its capacity of Poland plant to increase supplies to Ford.

LG Energy Solution runs battery facilities in six countries worldwide, with a total capacity of 200 gigawatt hours.

It aims to increase that to 300 gigawatt hours this year, and will up its investment by 50 percent to achieve the goal.

LG Energy Solution shares closed at 508,000 won Wednesday, down 2.31 percent from the previous trading day.

BY SARAH CHEA [chea.sarah@joongang.co.kr]