Ford and SK Innovation made a historic $11.4 billion investment in US battery-making

In recent years, Ford has debuted electric versions of its best-selling classics, like the Mustang and the F-150, the nation’s best-selling truck for 44 years running. Its latest EV announcement is much less flashy, but it goes right to the heart of EVs—and could be its most critical yet.

On Monday night, Ford unveiled an $11.4 billion EV investment plan, centered on lithium-ion battery production. SK Innovation, the No. 5 EV battery-maker in the world in terms of market share, is its strategic partner and accounts for $4.3 billion, or ~35%, of the spending.

Why it matters: Ford’s investment, which it says is the biggest manufacturing outlay in its history, will bolster its domestic battery-making capacity ahead of the expected surge in EV sales across this decade. US lawmakers, startups, and analysts have acknowledged a need to reduce reliance on China’s EV battery industry—the country accounts for at least 80% of battery component and materials production, per Bloomberg.

With the $11.4 billion, Ford and SK will build four plants in Kentucky and Tennessee, three of which are focused on battery production and one that is focused on electric truck assembly. Production at the plants is slated to begin in 2025.

• In total, the plants will produce 129 gigawatt hours (GWh) of battery output annually—enough to power 1 million EVs. For context, the 3 million new EVs that hit the road worldwide last year had 134.5 GWh of battery power total.
• Ford’s Tennessee plants will use “closed-loop” manufacturing to repurpose battery materials and eventually reduce reliance on mining metals like lithium and cobalt. Enter: new strategic partner Redwood Materials.

Big picture: The bipartisan infrastructure bill, which was dramatically delayed last night, would authorize $6 billion in total funding for the US EV battery industry.—DM