DETROIT -- Ford Motor Co. and South Korean battery maker SK Innovation on Thursday announced they will form a battery joint venture in North America to support the No. 2 U.S. automaker's electric vehicle rollout.
The companies said they have signed a memorandum of understanding for the formation of the venture, called BlueOvalSK. Reuters on Wednesday reported plans for the joint venture.
Details of the venture's ownership structure will be set in the finalized agreement, expected later this summer, Ford said.
The plan is for the partnership to produce about 60 gigawatt-hours annually in traction battery cells and array modules, starting mid-decade, with potential to expand, the companies said.
That target would equal two jointly owned plants, the locations for which have not been identified, Ford North American COO Lisa Drake said on a call with reporters.
Ford's global EV plan calls for at least 240 GWh of battery cell capacity by 2030, equal to about 10 plants, said Ford's chief product platform and operations officer, Hau Thai-Tang. Some 140 GWh of that will be required in North America, with the balance in other regions, including Europe and China.
"This is really to support the delivery of our winning BEV programs coming online now with Mach-E, E-Transit and the F-150 Lightning, but this is just the start," Thai-Tang said, referring to the electric crossover, delivery van and pickup truck Ford has developed.
SK Innovation's battery marketing division head, Yoosuk Kim, also said the company plans to make batteries for other vehicle programs across various U.S. locations in the future.
Talks around the joint venture picked up speed last month after SK agreed to pay $1.8 billion to LG Energy Solution, a wholly owned subsidiary of LG Chem Ltd., to settle LG's accusations of trade theft by its rival, a source previously told Reuters.
The dispute, which the administration of U.S. President Joe Biden had been on the verge of settling with a ruling, had put at risk SK Innovation's battery cell plant in Georgia, where it has invested $2.6 billion. That plant, which is under construction, will serve Ford and Germany's Volkswagen AG.
Biden on Tuesday called for government grants for new battery production facilities as part of a $174 billion EV proposal during a visit to a Ford EV plant in Michigan. He also urged automakers to support the creation of union-represented jobs.
The United Auto Workers, which represents Ford's U.S. hourly workers, said on Thursday the automaker has a "moral obligation" to make sure the battery plant jobs are good-paying union jobs. Drake said that will be determined by the joint venture.