Ford Motor Company (F.N) and SK Innovation (096770. KS), a Korean battery partner, will invest $11.4 billion in the United States to create an electric F-150 assembly line and three battery plants, speeding the automaker’s push into electric vehicles. Ford announced on Monday that by 2030, it expects 40 percent to 50 percent of its global car volume to be all-electric, up from its previous prediction of 40 percent.
As part of Ford’s previously disclosed commitment to investing more than $30 billion in electrification through 2030, the firms plan to establish assembly and battery operations in Stanton, Tennessee, as well as two additional battery factories in Glendale, Kentucky. Plants will open in both locations in 2025. The announcement on Monday represents Ford’s single-largest manufacturing investment in its 118-year history.
Ford North American Chief Operating Officer Lisa Drake told Reuters in an interview that the Tennessee assembly and battery complex will be almost three times the size of Ford’s huge, century-old Rouge manufacturing plant in Dearborn, Michigan. She underlined that there will be room to grow on that particular site.
The South Korean battery manufacturer has production facilities in the United States, Hungary, China, and South Korea, and sells electric car batteries to Ford Motor and Hyundai Motor Co (005380. KS), among others.
SK Innovation plans to achieve an annual capacity of roughly 150 gigawatt-hours (GWh) of batteries in the United States with the development of three more battery factories and two battery plants in Georgia.
By 2025, SK Innovation intends to surpass its target of securing a global production capacity of 200 GWh of batteries. It has a current capacity of 40 GWh. In early trade, SK Innovation shares soared as much as 3.6 percent to a near two-week high of 260,500 won, outperforming the broader market KOSPI’s (.KS11) 0.8 percent decline. On Monday, Ford ended the day with a gain of 2.8 percent.
Under Jim Farley, who came over as CEO in October and plans to launch the electric F-150 Lightning pickup truck next spring, Ford has pushed more quickly to implement its EV vision. Due to significant pre-launch demand for the electric truck, Ford increased the planned production capacity for the F-150 Lightning to 80,000 units per year in Dearborn, Michigan, earlier this month.
As governments and regions such as China and Europe attempt to reduce vehicle emissions, Ford and other automakers are working hard to prepare for the introduction of electric vehicles.
Ford and SK unveiled a memorandum of agreement in May, which paved the way for the proposed lithium-ion battery factories. The battery factories would be co-owned by SK and will have a total annual capacity of 129 GWh of batteries, enough to power nearly 2.2 million electric vehicles when fully operational, according to Drake. More than 1 million electric vehicles could be powered with the extra capacity.
Ford previously stated that its global electric vehicle plan aims for at least 240 GWh of battery cell capacity by 2030, which is around 10 factories spread throughout North America, Europe, and China. SK has stated that by 2025, it plans to increase its annual global battery capacity to more than 200 GWh.