November 28, 2024

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A view of BlueOval SK’s Kentucky plant construction site in the US (SK On)

South Korean electric vehicle battery maker SK On confirmed Wednesday its withdrawal from a battery project in Turkey, where it had planned to build a new EV battery plant as part of a joint venture with US auto giant Ford.

“We can confirm that the nonbinding memorandum of understanding between Ford, SK On and KOC Holding has been terminated by mutual agreement,” the three parties said in a statement.

“We still have a strategic partnership on plants in Hungary and Georgia and ongoing battery plant construction through (BlueOval SK), a joint venture between SK On and Ford, in Kentucky and Tennessee.”

In a separate regulatory filing on Tuesday, Turkish real estate developer KOC Holding said: “We are exploring alternative options to move forward with the battery plant investment deal,” adding that talks are underway with LG Energy Solution and Ford.

LG Energy Solution, the nation’s largest EV battery maker, maintained a low profile on the matter. “We are in talks with (Ford) on the project, but nothing is concrete yet,” said an LG Energy Solution official.

The battery maker’s business ties with Ford goes way back to 2011 when it had supplied batteries to the Ford Focus EV. Since 2020, the battery maker has been producing batteries for Ford’s Mustang Mach-E sports utility vehicles and E-Transit vans.

Strengthening the EV battery alliance, LG vowed to double the production capacity of Ford’s EV batteries in its plant in Poland by this year.

Industry insiders said even if LG Energy Solution decides to go ahead with the project, it might take some time to make the construction site in Turkey shovel-ready.

“Although the plant’s construction site is far from the devastated earthquake-hit areas, it might take some time to normalize the power supply and logistics,” said a source on condition of anonymity.

In March, SK On, Ford and KC Holdings signed a deal worth up to 4 trillion won ($3.2 billion) to discuss setting up a joint venture in the Turkish capital city of Ankara. Slated to begin operation as early as 2025, the plant had been expected to have a production capacity of 30 to 45 gigawatt hours per year.

By Byun Hye-jin (hyejin2@heraldcorp.com)