Ford, Mercedes Accelerate Pivot into EV Space

By Glenn Dyer | More Articles by Glenn Dyer

Ford Motor Co and German luxury giant Mercedes Benz have provided further details on their planned billions of dollars in new spending on battery and new car plants in yet another sign of the enormous pent-up demand for key renewable materials like lithium, copper, nickel and aluminium and steel.

First up, Ford confirmed this week that it and its South Korean battery partner SK Innovation will invest $US11.4 billion to build an electric F-150 (pick up) assembly plant and three battery plants in the United States.

Mercedes in turn revealed a partnership to build batteries with rival car maker, Stellantis and TotalEnergies, the huge French-owned energy giant (see below).

Ford’s Monday announcement was massive, detailing the single largest manufacturing investment in the giant’s 118-year history.

Ford said on Monday it now expects to have 40% to 50% of its global vehicle volume to be all-electric by 2030, up from its prior forecast of 40%.

That’s still well short of Toyota’s ambition for 80% of its vehicles to have some sort of battery by 2030. Toyota’s cost is estimated at $US13.6 billion in 2021 dollars.

Ford and SK have considerable ambitions – they say they intend to create nearly 11,000 jobs by opening assembly and battery plants in Stanton, Tennessee in the US, and two additional battery factories in Glendale, Kentucky.

These are part of Ford’s previously announced plan to spend more than $US30 billion through 2030 on electrification, Ford said. The two plants are expected to open in 2025.

Of the $US11.4 billion Ford is up for $US7 billion, with SK covering the rest. The companies will invest $US5.8 billion in Kentucky, and $US5.6 billion in Tennessee.

SK already supplies electric car batteries to Ford Motor and Hyundai Motor Co and has battery production sites in the United States, Hungary, China and South Korea.

With its three additional battery factories and two battery plants in Georgia, SK Innovation is set to secure an annual capacity of about 150 gigawatt-hours (GWh) of batteries in the United States.

SK Innovation says it expects to exceed the goal of securing an annual global production capacity of 200 GWh of batteries by 2025. Its current capacity stands at 40 GWh, so a 500% increase in four years.

Shares of SK Innovation rose as much as 3.6% to hit a near two-week high of 260,500 won in morning trade, versus the broader market KOSPI’s 0.8% fall. Ford closed up 2.8% on Monday.

Earlier this month, Ford doubled planned production capacity in Dearborn, Michigan, for the F-150 Lightning to 80,000 units a year because of strong pre-sales.

The new lithium-ion battery plants build on a memorandum of understanding announced by Ford and SK in May. The battery plants will be jointly owned and have a combined annual capacity of 129 GWh of batteries, which could power about 2.2 million EVs when fully operational, more than double the level outlined in May, according to Ford.

The new capacity would be enough to power more than 1 million EVs.

Ford previously said its global EV plan calls for at least 240 GWh of battery cell capacity by 2030, equal to about 10 plants that will be placed in North America, Europe and China. SK has said it aims to ramp up annual global battery capacity to more than 200 GWh in 2025.

The site will also include zero-waste-to-landfill processes to capture materials and scrap.

Monday’s announcement builds on Ford’s deal last week to partner with Redwood Materials to form a circular supply chain for EV batteries, from raw materials to recycling. Redwood will be located at Ford’s Tennessee site (see separate story).

Ford also revealed on Monday plans to separately spend $US525 million over the next five years to fund job training and career readiness initiatives for American car technicians to help prepare for the shift to EVs.


Meanwhile, Daimler’s Mercedes-Benz has also revealed its strategy for moving deeper into the EV space, announcing it will take a 33% stake in battery cell manufacturer Automotive Cells Company (ACC) alongside the project’s original founders, rival automaker Stellantis (Fiat, Jeep, Chrysler, Opel, Alfa) and French energy giant TotalEnergies.

The partnership aims to develop cells and battery modules and “help ensure that Europe remains at the heart of the auto industry – even in an electric era”, Daimler CEO Ola Kaellenius said in a statement. ACC will supply Mercedes-Benz with battery technology from the middle of the decade.

As part of the deal, Daimler will invest a mid-three-digit million euro sum in the project next year, adding that its overall investment was expected to stay below 1 billion euros ($US1.2 billion).

ACC, which has also received 1.3 billion euros in French and German funding, is budgeted to require seven billion euros in equity, debt and subsidies to reach its desired capacity of 120 Gigawatt hours (GWh) by the end of this decade.

In July Daimler revealed plans to become ‘all-electric’ by 2030 with plans eight gigafactories – including one in the US and four in Europe – with existing partners and one new unnamed partner, with a capacity of at least 200 GWh.

ACC started in September 2020 as a joint venture between France’s Stellantis and TotalEnergies. It already has a 2 billion euro investment in a battery cell plant in Kaiserslautern, due to start production in 2025 (and close to the Opel factor of Stellantis).

Daimler’s CEO said his company had also talked to other European battery cell makers in Sweden and Britain but ACC was seen as the best ‘fit’ with Mercedes.

Daimler already has battery deals with China’s CATL and has a shareholding in another Chinese company, Farasia which wants to build a plant in Germany. There have been claims the latter’s batteries are not performing to specs.

All these plants will need lithium and other raw materials. Rio Tinto has ambitious plans in Serbia which are finding local opposition, especially on environmental grounds.

Earlier this year Daimler said Mercedes would spend around 40 billion euros or around $US47 billion between now and 2030 to electrify its fleet.


Some final battery news from the US, with emerging start up QuantumScape developing solid-state lithium metal batteries for electric vehicles such as VW.

Solid state batteries are staring to become a real option, and rival for lithium ion-based technologies.

Last week the company signed up a second, unnamed car maker to collaborate on the evaluation of prototype solid-state battery cells.

QuantumScape is looking at solid state lithium metal batteries for electric cars. The company is headquartered in San Jose, California with investors including Bill Gates and Volkswagen.

Gates is also an investor in Lilac Solutions, which is linking with Lake Resources in a major lithium-from-brine project in Argentina that holds a lot of promise for a cheap, environmentally friendly production process.

The tax credits and rebates included in the Biden infrastructure plan should provide significant support for electric vehicle sales in the United States, which is good news for the battery specialist companies.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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