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 Wednesday 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.
“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.
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.
By 2030, Ford expects annual energy demand for its vehicles will be up to 140 GWh annually in North America and up to 240 GWh globally.
The creation of the joint venture, which was first reported Wednesday by Reuters, is subject to definitive agreements, regulatory approvals and other conditions.
In May, CNBC first reported Ford expected to be selling enough EVs to begin manufacturing its own battery cells by 2025.