Ford (F) Partners SK Innovation, EV Game Gains Traction

Ford Motor Company F recently entered into a memorandum of understanding (MOU) with South Korea-based SK Innovation to form a joint venture (JV) — named BlueOvalSK — to manufacture battery cells and array modules in the United Sates. The new venture will approximately produce 60 gigawatt hours (GWh) annually starting mid-decade, subject to regulatory approvals. The manufactured battery cells and arrays will be used to run future Ford electric vehicles (EVs).

SK Innovation is a global energy conglomerate that has spearheaded the development of EV batteries since 1991 and expanded battery operations globally since 2010. The company already operates a battery facility in Georgia and aspires to become one of the world’s top three EV battery suppliers by 2025, with more than 125 GWh of global production capacity. The company has a proven track record in EV battery manufacturing, with not a single EV battery-related fire.

Ford and SK Innovation’s relationship goes back years. It started with the automaker selecting SK Innovation as its battery supplier for the legendary and best-selling F-150 Lightning.

By 2030, Ford expects annual energy demand for vehicles to increase to 140 GWh annually in North America and 240 GWh worldwide. With the help of the latest JV, Ford and SK Innovation will collectively mass produce battery cells that are customized to efficiently add value for customers. For Ford, SK Innovation will prove to be an ally in providing batteries with better range and value for its EVs by mid-decade. Moreover, the BlueOvalSK MOU showcases Ford’s commitment to vertically develop its battery capabilities.

Ford’s Accelerated EV Push

Ford is committed toward its goal of providing completely carbon-free transportation in the upcoming years and is boosting electrification efforts to attain this target. The company has always been at the forefront of the automotive revolution and is focused on its vision of an all-electric future, including providing fifth-generation lithium ion batteries as well as preparing for the transition to solid-state batteries, which warrant longer range, reduced cost and safer EVs for customers.

The automaker, earlier this year, committed to invest at least $22 billion through 2025 to deliver EVs globally by capitalizing on its strength, starting with EV versions of the company’s most popular models.

Last month, Ford announced the decision to establish a new global battery center of excellence — Ford Ion Park — in Southeast Michigan. As the auto biggie scales up production of EVs globally, this newly-created battery center will help the company accelerate research and development of battery and battery cell technology. The company will equip the center for future battery manufacturing. Additionally, the automaker plans to invest $185 million for opening a collaborative learning lab in Southeast Michigan. The lab is focused on developing and manufacturing lithium ion as well as battery cells and arrays, and testing manufacturing methods, while the team works on integrating all aspects of the value chain.

Earlier this month, Ford announced that it is increasing investment in Solid Power, an industry-leading producer of all-solid-state batteries for EVs. Ford, which initially invested in Solid Power in 2019, is making an additional equity investment to help accelerate further development of solid-state vehicle battery technology.

Ford Unveils F-150 Lightning

Ford recently showcased the first all-electric version of the best-selling F-150 pickup truck, called F-150 Lightning, at its headquarters in Dearborn, MI. Reportedly, the model is scheduled to hit the market in spring 2022.

In terms of design, the F-150 Lightning remains true to the earlier F-150 models. However, the front has been tweaked to include a new LED strip running on top of it, connecting the headlamps. The truck will also have a frunk to store items in front of the truck wherein the engine is normally located. Also, the F-150 will come with a touchscreen in the cabin, with a width of almost 40 centimeters.

The truck will have 563 horsepower and 775 lb.-ft. of torque, more than any other version of the F-150. The standard model of Lightning has enough power to drive up to 370 kilometers on a single charge, but a version with extended range can go up to 480 kilometers. In fact, Ford claims that 10 minutes of charging would provide the vehicle with enough power to run for more than 50 kilometers. Moreover, Ford aims for a mass appeal by providing the truck at a jaw-dropping base price of $39,974 in the United States.

The truck is the latest entrant in the electric truck space, wherein competition is already rife. Moreover, this launch will prove to a game changer for Ford in its quest to bring a revolution in the EV landscape.

Ford, whose peers include Tesla TSLA, General Motors GM and Volkswagen VWAGY, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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