Ford, LG Energy to build Turkey EV battery plant for Europe

US automaker Ford Motor Co. and South Korean battery manufacturer LG Energy Solution Ltd. are targeting the electric commercial vehicle sector in Europe, the world’s second-largest EV market, by building a cell plant in Turkey with a local partner.

Ford, LG Energy and Turkish investment holding company Koç Holding AS said they agreed to establish a joint venture to produce battery cells for electric commercial vehicles in Başkent, near Ankara.

The three companies are scheduled to break ground on the factory later this year with an aim to start production in 2026. The plant is set to manufacture at least 25 gigawatt-hours (GWh) a year and the capacity could be expanded to up to 45 GWh.

“Establishing the new joint venture with LGES and Koç Holding will lay a solid foundation that is fundamental to building a thriving electric vehicle future for Ford in Europe,” said Lisa Drake, Ford EV Industrialization vice president, in a statement on Tuesday.

Ford, the leading commercial vehicle brand in Europe for the last eight years, plans to offer an all-electric fleet of vans and passenger vehicles, as well as new zero-emission vehicles in the region by 2035.

Last year, the company unveiled a plan to introduce four new electric commercial vehicles and three electric passenger vehicles in Europe by 2024.

The US carmaker is already producing some 450,000 commercial vehicles a year from Ford Otosan, its JV with Koç in Turkey formed in 1959. The JV, which accounts for 45% of Turkish automobile production and 41% of exports, ships many of its products to Europe.

LG ENERGY TARGETS ELECTRIC COMMERCIAL VEHICLE MARKET

LG Energy, the world’s second-largest EV battery maker, aims to expand its presence in the European electric commercial vehicle market through the Turkish project.

The South Korean company, Ford’s longtime partner, in July 2022 announced a plan to double capacity of its Poland factory to meet growing demand for Ford’s popular electric commercial vehicle E-Transit and electric sedan Mustang Mach-E in Europe. The capacity will be increased gradually further.

“Now joining forces with Ford and Koç in Turkey, we will bring in our leading battery technology to further boost the EV transition in Europe,” LG Energy CEO Kwon Youngsoo said.

Last month, the company inked a supply deal estimated up to $3.3 billion for Europe and North America to expand its presence in the electric commercial vehicle sector with high growth potential.

LG Energy plans to ramp up investment by 50% this year compared with last year to increase its annual global battery production capacity to 300 GWh by the end of 2023 from the current 200 GWh.

The company with an order backlog of 385 trillion won ($295 billion) as of end-2022 aims to raise sales by up to 30% this year.

Write to Hyung-Kyu Kim at khk@hankyung.com

Jongwoo Cheon edited this article.