Ford, LG Energy Solution (LGES) and Turkish conglomerate Koç Holding have signed a nonbinding agreement to form a joint venture (JV) to create one of Europe's biggest electric vehicle battery cell facilities in Türkiye, the companies said Tuesday.
The agreement comes two weeks after South Korean electric vehicle maker SK On, a unit of SK Innovation Co. Ltd, withdrew from the joint venture in which it was meant to be a partner under a deal agreed last year.
The new joint venture, which will be located in an organized industrial zone near Ankara, is expected to break ground later this year, with battery cell production set to begin in 2026.
The three parties committed to at least 25 gigawatt-hours (GWh) of annual production capacity, which could potentially expand up to 45 GWh.
By 2035, Ford in Europe is on track to offer an all-electric fleet of vans and passenger vehicles.
"Ford continues to ramp up our electric vehicle plans as we scale to be a leader in the electric vehicle revolution. We are delivering on the commitment to produce batteries in the same region where we build electric vehicles. Establishing the new joint venture with LGES and Koç Holding will lay a solid foundation that is fundamental to building a thriving electric vehicle future for Ford in Europe," said Lisa Drake, vice president of Ford EV Industrialization.
The automobile manufacturer has a long-standing business relationship with LG and Koç Holding.
Ford and LG worked together for over a decade, with LG most recently supplying batteries from its plant in Poland for the Ford Mustang Mach-E and E-Transit.
Ford and Koç Holding have a partnership that stretches back almost a century and includes the successful Ford Otosan joint venture, now over 60 years old.
"Our longtime business relationship with Ford is the result of our commitment to deliver unmatched product competitiveness, stable yields and global operational expertise, made possible by our extensive knowledge accumulated through pre-emptive investments in global markets," said Youngsoo Kwon, CEO of LG Energy Solution.
"Now joining forces with Ford and Koç in Türkiye, we will bring in our leading battery technology to further boost the EV transition in Europe, leading the global initiatives for a more sustainable future."
"We deeply feel the pain of the terrible earthquake disaster that occurred on Feb. 6. As Koç Group, we mobilized all our resources for our country. We believe that investments such as this major one will play a crucial role in overcoming this extraordinarily difficult period. In this respect, we underline our determination to implement this investment facility with two global companies which will bring our country a significant global competitive advantage in the automotive industry. We express our condolences to our nation and truly believe that we will overcome these difficult times with unity and solidarity," Koç Holding said in a statement.
"As Europe’s leading commercial vehicle brand for the past eight years, we want to continue providing our customers with the most efficient and innovative vehicles supporting their business goals through our Ford Pro vehicle services and distribution business. This new battery joint venture is a prime example of how we are leveraging our strategic business relationships to strengthen our business."
LG Energy Solution, which has the largest global battery manufacturing network in the world, currently has a total annual production capacity of 200 GWh.
The company plans to increase capacity to 300 GWh by the end of the year.