BlueOval SK, a joint venture between SK On and global automaker Ford Motor Company for manufacturing electric vehicle batteries, is poised to move to its next phase. The two companies secured a key bridgehead to preoccupy the electric vehicle market by smoothly completing the establishment of a joint venture.
According to SK On both companies have recently completed the internal and external reviews as they prepare to launch a joint venture. BlueOval SK is officially established as of July 13.
The two companies will hold equal ownership in the new venture and the JV will be a consolidated subsidiary of SK On. The board of directors consists of six members, three from each company.
The JV’s headquarters are located in Georgia, where SK On’s U.S. production facilities are located for the time being, and will move to BlueOval City in the future. BlueOval City, which Ford is building in Stanton, Tennessee, will house BlueOval SK’s battery plant, Ford’s electric vehicle assembly plant, and parts and materials complex.
In the fall of last year, the two companies announced that they would invest a total of 10.2 trillion won ($7.78 billion), 5.1 trillion won each, to establish BlueOval SK, with one battery plant in Tennessee and two in Kentucky.
The Tennessee plant will be built on area site of 15.54 million square along with Ford’s EV production plant. The Kentucky plant site has a total area of 6.28 million square meters. The production capacity is a total of 129 gigawatt hours.
The first chief executive officer (CEO) will be SK On’s CEO David Hahm, and the chief financial officer (CFO) will be Ford’s Jiem Cranney. After approximately three years, the two companies will exchange the positions.
CEO Hahm joined SK Innovation legal team in 2009 after working for Mayer Brown, Guggenheim Partners, and Goldman Sachs as a legal and financial expert. He has served in various roles, including planning and management. Since 2016, he has been in charge of investments, acquisitions and mergers, and has also led the establishment of the joint venture with Ford.
To help ramp up a quality launch of BlueOval SK even ahead of its official launch, the two companies have been coordinating opinions on maximizing productivity through several joint workshops. For the success of establishing the venture and optimizing its operations, the two companies discussed several times key areas such as manufacturing, procurement, IT, legal affairs, finance, and human resources to prepare future operational plans.
The two companies, along with Koc Holdings, announced in March that they would set up a joint venture in Turkey with a production capacity of 30 to 45 gigawatt-hours. The two companies are working together not only in the U.S. market but also in the European market.
The full-size electric pickup truck F-150 Lightning, released by Ford this spring, is exceedingly popular with customers. Along with this EV’s success, the performance of SK On, its battery supplier, is also soaring.
Ford announced that it will need 140 gigawatt-hours of batteries in North America by 2030 and 240 gigawatt-hours of batteries worldwide by 2030. SK On will be key in supporting these needs.
SK On also is solidifying its position in the global battery market through its own investment as well as a joint venture.
The company plans to expand its production capacity from mere 1.6 gigawatt-hours in 2017 to 77 gigawatt-hours by the end of this year through steady investments in the United States, Hungary, and China. By 2030, it is expected to expand to more than 500 gigawatt-hours. In addition, SK On’s market share is also growing rapidly, and its market share ranking, which was ninth in 2019, has now risen to fifth.
CEO David Hahm said, “SK On has the top technology in the battery field, such as high-nickel batteries, and Ford is America’s Favorite car company. With the strong partnership between these two companies, we will secure unparalleled competitiveness in the global EV market.”