LG Energy to double Ford battery pack production line in Poland

LG Energy Solution Ltd., SK Innovation Co., and other South Korean companies are poised to strengthen their business ties with Michigan-based Ford Motor Company in an effort to cement their footholds in North America. 

LG Energy Solution announced Thursday it will increase its supply of battery packs to Ford, on the back of increased sales of the company’s popular electric vehicle Mustang Mach-E and commercial electric car E-Transit. 

The mineral procurement arm of LG Corp. will double its capacity at the Poland-based battery pack production facility for Ford by next year. The company will then gradually increase its output.

While the company refrained from announcing the size of the expansion, industry insiders estimate it to be around 30 GWh per year. 

The plant’s mass production capacity currently stands at 70 GWh. 

The LG Energy plant based in Wroclaw, southwestern Poland, is Europe’s largest manufacturing facility of lithium-ion batteries for the automotive industry.

ELECTRIFYING GOALS

A day prior, Ford announced it will produce 270,000 Mustang Mach-Es, 150,000 E-Transits, 150,000 F-150 Lightnings, and 30,000 of its upcoming mid-sized electric SUVs in overseas plants by late 2023. 

The US carmaker recorded $136 million in revenue last year. 

In particular, LG Energy Solution and China’s Contemporary Amperex Technology Co. (CATL) will provide battery packs for the production of Mustang Mach-E, LG Energy Solution and SK On Co. will provide them for the E-Transit, and SK On alone will provide them for the F-150 Lightning. 

If all goes as planned, 20.4 - 26.7 GWh battery packs will be installed on Mustang Mach-E and 10.2GWh on E-Transit by next year. 

LG Energy Solution has been supplying battery packs for Ford’s Mustang Mach-E and E-Transit since the latter half of 2020. 

Ford sold more than 55,000 Mustang Mach-Es around the globe last year alone. The company has been steadily increasing its production on the back of robust sales.

Ford CEO Jim Farley tweeted late last year that the automaker plans to more than triple its Mustang Mach-E production capacity by 2023. 

In the larger scheme of things, Ford plans to inject $50 billion into the electric vehicle sector by 2026 with the aim of pushing out 2 million EVs annually. 

By 2030, the company hopes EVs will make up at least half of its entire sales. 

INVESTING IN CATHODE 

Ford said that SK Innovation will increase the production capacity of its plants in the US state of Georgia. The South Korean company built two plants in Jackson County, northeast of Atlanta.

The company also announced other battery material deals. It signed a letter of intent with SK Innovation’s wholly owned subsidiary SK On and EcoPro BM Co. to establish a cathode production plant in North America. 

The cathode is an essential element in battery production that determines its performance. 

SK On said it has recently signed a letter of intent with Ford and ECO PRO BM Co. to start construction of the plant in late 2023.

The three companies have yet to decide on the ratio of their investments and the plant site.

The cathode materials to be produced in the plant will be supplied to BlueOval SK. The 50:50 battery-making joint venture set up between SK On and Ford Motor is for electric vehicle production in the US.

Cathode materials are the main component of lithium-ion batteries.

Write to Hyung-Kyu Kim at khk@hankyung.com
Jee Abbey Lee edited this article.