DETROIT – Ford Motor plans to form a joint venture with South Korean battery maker SK Innovation that will eventually manufacture battery cells for electric vehicles in the U.S.
The companies on Thursday announced they have signed a memorandum of understanding for a joint venture that will be called BlueOvalSK. Production of the battery cells as well as well as supporting modules is expected to start by mid-decade, the companies said.
The announcement comes amid an expected surge in electric vehicle sales as well as a push by the Biden administration to increase domestic production of critical technologies for EVs such as battery cells, which power the vehicles.
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“As the industry changes, we have to insource now,” Ford CEO Jim Farley told reporters Wednesday night during the unveiling of the automaker’s new electric F-150 Lightning pickup.
The supply and production of battery cells are crucial for automakers pivoting to electric vehicles. Farley compared it to automakers building their own engines and powertrain components in the early 1900s. He said it will help avoid any potential future shortages like the industry is currently experiencing with semiconductor chips.