NEW YORK/SEOUL — Ford Motor will form a joint venture with South Korea’s SK Innovation to manufacture batteries for electric vehicles in the U.S., the companies said Thursday.
Through the venture, named BlueOvalSK, the two partners will invest about $5.3 billion to build a new battery plan in the U.S.
The announcement, which comes ahead of a summit between U.S. President Joe Biden and his South Korean counterpart Moon Jae-in on Friday, marks the latest U.S.-Korean alliance on EV batteries, after General Motor’s partnership with LG Chem.
Moon plans to visit an SK Innovation plant in Atlanta, Georgia during his U.S. trip.
BlueOvalSK aims to reach annual production capacity of 60 gigawatts by the middle of the decade. This would be equivalent to batteries for about 600,000 electric pickup trucks.
Separately, SK has plans to build two factories in the state of Georgia to supply EV batteries to Ford.
The U.S. is trying to convince Moon to agree to a strong statement of concern about China, the Financial Times reported Thursday. But the South Korean president, who will be the second world leader to meet Biden in person on Friday after Japanese Prime Minister Yoshihide Suga, is reluctant to include language that would trigger a sharp response from Beijing.
Business, meanwhile, is an area where the two sides can collaborate. EV batteries are a priority in an executive order signed by Biden calling for stronger U.S. supply chains. The Biden administration looks to cut U.S. reliance on Chinese manufacturing.
Moon will be accompanied by a business delegation on his U.S. trip, including SK Group Chairman Chey Tae-won and Samsung Electronics Vice Chairman Kim Ki-nam.
South Korea’s top four chaebol groups — Samsung, Hyundai Motor, SK and LG — are expected to announce new investment plans worth an estimated 40 trillion won ($35.5 billion) in the U.S. on the sidelines of the summit talks, according to Korean media.
Chinese battery heavyweights such as BYD and Contemporary Amperex Technology Co. Limited, or CATL, face barriers in the U.S market because of trade tensions between Beijing and Washington.
“They think they’re going to win,” Biden said at a Ford EV plant in Michigan on Tuesday, referring to American automakers’ Chinese rivals. “Well, I got news for them: They will not win this race. We can’t let them.”
The SK and LG groups are taking advantage of Sino-U.S. tensions by investing in American production capacity. Though Japanese cell supplier Panasonic has secured a battery deal with Tesla, the two South Korean players look to quickly mass produce batteries with two of the biggest traditional U.S. automakers.
LG Energy Solution and GM said last month they will invest more than $2.3 billion to build another battery plant in the U.S., in the state of Tennessee..
Another South Korean player, Samsung SDI, supplies batteries to European automaker Stellantis, which owns the Chrysler brand.