Ford’s battery partners are also scaling back investments
We already reported on Ford’s plan to postpone its second battery factory with SK On in Kentucky. Plants 1 and 2 in Kentucky will each have a production capacity of 43 GWh and manufacture lithium-ion batteries for Ford and Lincoln EVs. Ford assumes that the first 43 GWh will initially be sufficient.
Citing insiders, the Korea Economic Daily reports that LG Energy Solution is considering delaying the ground-breaking ceremony for its battery cell factory that it is building with Ford in Turkey. Construction was to begin before the end of the year – but the decision is not final yet. It is also unclear whether a delayed start of construction would jeopardise the commissioning planned for 2026.
Regardless, LG Energy Solution intends to reduce output at its sole battery cell factory in Poland due to a reduced production volume for EVs from its partner Volkswagen. However, the factory in Wroclaw not only produces battery cells for various VW Group brands, but also for Ford. Even though the Ford Mustang Mach-E is produced in Mexico, its battery cells come from Poland.
“Given Ford’s recent decision to cut EV investments, the industry slowdown and local circumstances, there is little incentive for the stakeholders to proceed quickly,” the newspaper quotes one of the sources as saying.
According to the report, battery material manufacturers in South Korea are also adjusting their investment plans. Korea Zinc will postpone the start of mass production of copper foil for LG Energy Solution, initially planned for the third quarter of 2023, to the first half of 2024 and has put plans to build a battery recycling factory in the US on ice until the end of this year.
The South Korean battery material manufacturer L&F, which counts Tesla among its main customers, has postponed the planned ramp-up of its cathode plants and reduced the size of its plants for anodes, precursors and LFP materials. EcoPro BM will also reduce its plant investments by ten per cent in 2023.
At the end of October, Ford announced at the presentation of its Q3 financial figures that it would only gradually implement its planned investments because of a billion-euro loss in the Model e electric division and weaker demand. “Many North America customers interested in buying EVs are unwilling to pay premiums for them over gas or hybrid vehicles, sharply compressing EV prices and profitability,” the manufacturer wrote in a statement. Construction of Blue Oval City – Ford’s new EV production campus in Tennessee – will go ahead as planned, but other projects will be delayed.