Disclosure of a local company in Turkiye that was working with the project
The European electric vehicle plant project that SK On was pushing together with Ford in Turkiye has finally collapsed. Ford’s new partner is LG Energy Solutions.
The Turkish local company Coach Group, which promoted the project together, announced on the 7th (local time) that “the memorandum of understanding (MOU) between Ford and SK On regarding investment in the production of batteries for electric commercial vehicles has ended.”
SK On and Ford set up a battery joint venture near Ankara, the capital of Turkey, in March of last year and planned to start commercial production from 2025 with an annual capacity of up to 45 gigawatt hours (GWh). However, the airflow changed early last month as foreign media outlets, including Bloomberg, reported that the project would collapse, citing an anonymous source.
A Ford F-150 Lightning drives off-road with a camping caravan. provided by pod
It seems that SK On felt burdened with investment as the European electric vehicle market is expected to be sluggish amid the economic recession, such as high interest rates. SK On explained, “Although we couldn’t be together this time, the two companies are still carrying out major projects such as a battery plant in Kentucky, USA through joint ventures such as ‘Blue Oval SK’.”
Ford’s new partner in the European market is likely to be rival LG Energy Solutions. In a public announcement, the Coach Group said, “The plan for a battery production plant between Ford and Coach continues, and we are currently discussing with LG Energy Solutions.” This also coincides with what was reported earlier by foreign media outlets such as Bloomberg. LG Energy Solutions is in the position that “it is true that it is being discussed, but nothing has been decided yet.”
SK On recorded an operating loss of 991.2 billion won last year, the only one among the three domestic battery makers to record a loss. The deficit widened from the previous year (683.1 billion won). Recently, with the growth of the electric vehicle industry, production is significantly expanding, with the order backlog exceeding 290 trillion won, but new factories, including the Hungary plant, are said to be having difficulty securing yield.
The company’s original goal of exceeding the break-even point (BEP) in 2022 was pushed back to 2024. SK Innovation showed a willingness to continue investing even amid a widening deficit, such as announcing that it would spend 7 trillion won only on the battery business out of a total investment of 10 trillion won.
Reporter Oh Gyeong-jin