SK On, Ford breaks ground on largest EV battery plant in the US

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SK On aims to be top 3 globally by 2025, calling Biden’s IRA a boon for its expansion

SK Group Executive Vice Chairman Chey Jae-won delivers a congratulatory message at the BlueOval SK Battery Park groundbreaking ceremony in Glendale, Kentucky, Monday. (SK on)

BlueOval SK, a joint venture between SK On and Ford, has begun building the largest EV battery plant in the US, establishing a strong foothold to expand its market share in the global battery market.

According to SK On, about 400 business leaders, US state and federal officials and local residents including SK Group Executive Vice Chairman Chey Jae-won took part in the groundbreaking ceremony of the EV battery plant in Glendale, Kentucky , on Monday.

“Right here in Kentucky, Ford and SK are coming together to lead the future of the EV industry. We’re going to make the safest and most reliable battery in the world,” said Chey. “Over the next two years, BlueOval will SK has the largest and most advanced plants for EV batteries, and Kentucky will be an important center for the future of clean mobility.”

The official start of construction comes about 16 months after SK On and Ford announced in September 2021 that the companies would invest a total of $11.4 billion to build two mega manufacturing campuses in Kentucky and Tennessee with three battery plants.

The BlueOval SK Battery Park will feature the largest production capacity for a battery campus in the US. The site will have twin EV battery plants with a capacity of up to 43 gigawatt-hours for a total production of 86 GWh per year. The 1,500-acre complex is expected to be completed before the end of 2024. The company said it aims to start producing batteries for next-generation Ford and Lincoln EVs in the first quarter of 2025.

BlueOval SK also plans to break ground for another mega manufacturing campus in Stanton, Tennessee, within this year, according to SK On. Called the BlueOval City, the Tennessee campus will also boast a 43 GWh battery plant as well as Ford’s EV assembly factory and supplier facilities on a 3,600-acre site.

When both EV battery manufacturing campuses are fully operational, the South Korean battery maker will have a combined capacity of 150 GWh per year in the US alone with SK On’s two other EV battery plants in Georgia. That’s enough to power about 2.25 million EVs.

SK On and Ford said they will seek to create about 11,000 jobs by building two mega campuses in Kentucky and Tennessee.

“As both the largest economic development project in our state’s history and part of Ford’s largest investment ever, this project solidifies Kentucky’s status as the electric vehicle battery production capital of the United States,” Kentucky said. Gov. Andy Beshear.

SK On President Jee Dong-seob expressed confidence in the battery maker’s preemptive approach to establish a battery manufacturing portfolio in the US in response to the Biden administration’s Inflation Reduction Act, an “America-first” legislative order that provides government subsidies exclusively to EVs produced. in the US and mandates that the necessary materials for EV batteries be imported from countries that have free trade agreements with the US.

“In fact, the restriction itself is uncomfortable. But if companies can respond early to the restrictions, it can be a factor that will give them a competitive advantage in a profitable environment,” Jee said. at an earlier meeting with reporters in New York on Friday, ahead of Monday’s groundbreaking ceremony.

Regarding US-made batteries, the SK On chief pointed out that the company has prepared supply chains for raw materials centered on countries that have signed FTAs with the US.

He added that the IRA will have more positive effects on the battery industry in the long term, saying that SK On and LG Energy Solution, another South Korean battery maker, are leading the game.

“Once (the BlueOval SK plants) are completed, we will be a top three battery company in the world by 2025,” Jee said.

SK On said the company’s global market share was 6.2 percent this year as the world’s fifth largest battery maker. As one of the world’s fastest-growing battery makers, SK On’s battery market share in North America jumped 646 percent year-on-year in the January to October period, according to market tracker SNE Research.

SK Group Executive Vice Chairman Chey Jae-won (left) and Kentucky Gov. Andy Beshear poses for a photo during a beam signing event at the BlueOval SK Battery Park groundbreaking ceremony in Glendale, Kentucky, Friday. (SK on)

By Kan Hyeong-woo (hwkan@heraldcorp.com)