Ford JV partner SK sees U.S. battery shortage persisting until 2025

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SAN FRANCISCO, Oct 4 (Businesshala) – Ford Motor Co.’s battery joint venture partner, SK Innovation of Korea, expects the US auto industry to face battery supply shortages by 2025 due to a prolonged lead to construction of production facilities. SK’s top officials told Businesshala.

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SK Innovation’s battery arm, SK On, is also looking at developing a Lithium Iron Phosphate Battery (LFP), which has advantages in cost and thermal stability despite a shorter driving range, said SK Innovation Chief Executive Kim Joon and CEO Ji Dong-seob SK On said.

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Tight supplies of batteries – key to electric vehicles – pose a challenge for the Biden administration, which aims to boost EV production and reduce the country’s reliance on imports of battery cells, components and materials.

“Current US battery capacity is far less than meeting demand. It takes 30 months for a factory to be built to meet demand, and I expect battery shortages to continue until at least 2025, Kim said, referring to the time required to supply battery cells domestically, including factory site selection, manufacturing and product testing.

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Conversely, China is expected to have a higher supply of batteries, and Europe’s supply will be in line with demand, he said.

Ford and SK plan to invest $4.45 billion each to build three new factories in the United States, with production scheduled to begin in 2025.

With the deal for the plants, which will be the largest in the United States, SK said it has an industry-leading order backlog of 1,600 gigawatt hours, enough for 27 million vehicles.

SK Innovation spun off its battery business into its wholly owned entity, SK ON, with effect from 1 October.

Kim said Ford Motor CEO Jim Farley told him that Ford’s destiny was “in your hands.”

He said there is little chance that some automakers will be able to make their own efforts to build SAILs without partnering with SAIL makers who have experience in mass production.

“Cell manufacturing is not that easy. It has to go through a lot of trial and error,” Kim said.

Both officials said that SK is looking at developing LFP batteries for specific applications such as low-cost vehicles.

“Automakers are interested in LFP technology,” said SK On Kee Gee.

Ford and Volkswagen are diversifying LFP technology, a mainstay of Chinese battery makers led by Tesla.

Following a series of vehicles that have been linked to nickel-based batteries produced by LG and used in GM’s Bolt cars, the lower-grade, inexpensive LFP battery is also gaining attention for its thermal stability.

SK, which has no record of fire accidents, is planning to manufacture high-nickel, pouch-type batteries in its joint venture with Ford.

Zee expects the US electric car market to accelerate growth, driven by competition by major players such as Hyundai, Ford and Volkswagen. (Reporting by Hyunju Jin; Editing by Richard Pullin)


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