Ford joins hands with SKI to produce power lithium batteries in the U.S.

Foreign media reported that Ford Motor and SKI reached an agreement to establish a joint venture company in the United States to produce power lithium batteries. SKI is the battery supplier for Ford's new electric vehicle F-150 Lightning pickup truck. In February of this year, SKI was involved in trade secrets with LG Chem. SKI was ruled by the U.S. International Trade Commission (ITC) to prohibit it from developing power lithium battery business in the United States for the next 10 years. SKI stated on March 30 that if the Biden administration does not overturn ITC's final ruling before April 11, the company is considering withdrawing its battery business from the United States. But last month, SKI reached a settlement with LG Chem. SKI paid nearly US$1.8 billion (approximately RMB 11.6 billion) in compensation to LG New Energy. The two parties also agreed to withdraw all legal disputes in the United States and South Korea, and reached a 10-year non-dispute clause. This means that SKI can continue to operate its American battery plant as normal, and can continue to supply power lithium batteries to OEMs such as Ford and Volkswagen. SKI is currently investing US$2.6 billion (approximately 17 billion yuan) to build its American battery plant, with a total output of more than 20GWh. Among them, the first-phase output of the first battery plant in Georgia, USA is 9.8GWh, and mass production is expected to be realized in 2022. The second US plant has also started and is expected to be put into operation in 2023, with a planned output of 11.7GWh. Although SKI can continue to advance its battery business in the United States, Ford has realized that it is currently facing a battery supply crisis. ITC criticized Ford Motor Company before, because Ford still seeks to sign a battery contract with SKI after having evidence of the trade secrets of its competitors. This time Ford Motor plans to cooperate with SKI to produce power lithium batteries, the purpose is to ensure the stability of its local battery supply. It is worth noting that in addition to SKI, its rival LG New Energy is also increasing its investment in its US battery business. In early March, LG Chem announced plans to invest more than US$4.5 billion (approximately RMB 29.5 billion) by 2025 to expand its battery production capacity in the United States and build at least two battery plants. At present, LG New Energy has established a battery joint venture company UltiumCells with General Motors. UltiumCellsLLC is building a battery plant with an annual output of 30GWh in the United States. The total investment of the project is US$2.3 billion (approximately RMB 16.2 billion). It is expected to be put into operation by the end of 2022. Recently, General Motors and LG New Energy announced that they plan to establish a second battery joint venture company with an investment scale comparable to that of the first company. A few days ago, US President Biden announced an 'Electric Vehicle Program' worth about US$174 billion (approximately RMB 1.1 trillion), which will be used to stimulate the development and production of the US electric vehicle industry. Biden emphasized that the United States must take the lead in research and development and manufacturing of batteries and investment in electric vehicle research, especially in the manufacturing of power lithium batteries to surpass my country. This means that the localized production of power lithium batteries will become the focus of the 'Electric Vehicle Program'. In addition to this situation, power lithium battery projects built by Japanese and Korean battery companies, including Panasonic, LG New Energy, and SKI, will also become an important part of the US power lithium battery manufacturing.