Ford Will Source F-150 Lightning Batteries in U.S. after Just Missing a Battery Trade War

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• Logistics surrounding the debut of the 2022 Ford F-150 Lightning hinged in part on an unfair-trade dispute about batteries that carried the potential of delaying the truck's spring 2022 launch.

 

• Fortunately, two battery suppliers reached a $1.8 billion settlement that will help ensure battery supply for the rollout of the new electric pickup.

 

• The Lightning's battery will be built through a joint venture with SK Innovation in Georgia, and its production is unrelated to the other Ford EV, the Mustang Mach-E.

Ford, freed from a trade dispute involving two of its battery suppliers, will build the F-150 Lightning's packs at a new plant now under construction in Georgia.

Late this week, the automaker said it will partner with SK Innovation, a Korean supplier that also makes batteries for Volkswagen and Kia, to assemble 60 gigawatts' worth of batteries each year in Commerce, Georgia. That adds up to roughly 400,000 of the Lightning's longest-range packs—a massive undertaking that, in sheer volume, represents nearly half of all F-series sales—and by 2030, Ford wants to quadruple that output from all of its battery plants worldwide. The joint venture is to be called BlueOvalSK, Ford said.

 

Ford can rightly boast about its manufacturing prowess now, but early last month, Dearborn appeared like a potential casualty in a bitter war between two of Korea's biggest battery suppliers.

 

Ford had already been receiving heat from the United Auto Workers, which in March blasted the company for planning to build a second unnamed EV in Mexico, alongside the Mustang Mach-E, instead of in Ohio. But the bigger problem started back in April 2019, when LG Chem, which makes the Mach-E's batteries, filed a dispute with the U.S. International Trade Commission against rival battery maker SK Innovation, which by year's end in 2019 was under contract for the Lightning. At this same time, SK was breaking ground on its Georgia plant—its first in America, nearly a decade after LG Chem opened its first domestic plant for the Chevrolet Volt—that would supply Ford as well as Volkswagen's Chattanooga plant.

 

LG claimed SK stole trade secrets in part by hiring "about 100 of its employees," according to a report in the Atlanta Journal-Constitution. The company filed a complaint against SK on April 29, 2019, to trigger what's known as a Section 337 investigation. That part of a 1930 tariff law gives companies an expedited process outside the normal courts to seek damages against imported products that violate copyright, infringe patents, and "misappropriate trade secrets," according to the Trade Commission.

 

In response to this complaint, a panel of judges can approve a cease-and-desist order against the offending company and block its imports. Only the President of the United States has authority to override the Trade Commission, and only within 60 days. At the end of May 2019, the Trade Commission announced it would investigate the claims. That put SK's entire $2.6 billion factory, which promised 2600 jobs and hundreds of thousands of batteries for Ford and VW, in jeopardy.

 

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