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(LEAD) LG Energy Solution joins Ford, Koc for Turkey battery venture

All News 09:10 February 22, 2023

(ATTN: ADDS more details, background throughout; RECASTS lead)
By Kim Seung-yeon

SEOUL, Feb. 22 (Yonhap) -- LG Energy Solution Ltd. (LGES), South Korea's top battery maker, said Wednesday it has signed a non-binding agreement with Ford Motor Co. and Turkey's Koc Holding A.S. to push for a joint venture to build an electric vehicle (EV) battery plant in Turkey.

The announcement came two weeks after the Turkish conglomerate said in a filing the partnership with the U.S. automaker and South Korean battery maker SK On Co. had ended.

Industry sources have speculated that the loss-making SK On decided to opt out of the venture over rising costs and that LGES will likely be their new partner. LGES confirmed that talks with Ford and Koc began earlier and have been ongoing.

The memorandum of understanding commits the three companies to push for building an EV battery manufacturing facility in Baskent, a city near the Turkish capital of Ankara, LGES said in a release.

The factory, which is set to begin commercial operations in 2026, initially will have a production capacity of 25 gigawatt hours (GWh) before its annual output is expanded to 45 GWh.

The output from the plant will be supplied to Ford for its commercial vehicles, mostly the electric version of Transit vans. Ford and Koc have a joint venture in Turkey that produces 450,000 commercial cars annually and most of them are being sold in Europe.

"We expect to be able to further strengthen our market leadership in Europe. Ford will also be able to further expand its partnership with LG Energy Solution and enhance the stability in its battery supply, an essential element in the electrification process," a LGES official said.

LGES, the world's second-largest battery maker, has a global production capacity of 200 GWh a year, with its global production sites under operation in six countries. As of end-2022, it had an order backlog of 385 trillion won (US$294.8 billion).

Koc Holding, an automobile to finance conglomerate, has been a longtime partner of Ford since 1959. Its vehicle output accounts for 45 percent of the domestic vehicle production in Turkey and 41 percent of vehicle exports.

(LEAD) LG Energy Solution joins Ford, Koc for Turkey battery venture - 1


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