(Bloomberg) -- Ford Motor Co. and South Korea's SK Innovation Co. are poised to announce Thursday they've reached an agreement to jointly build electric-vehicle batteries in the U.S.
The two companies have reached a memorandum of understanding to pursue a joint venture to manufacture the power sources that are critical to becoming competitive in the emerging EV market, according to people familiar with the deal who asked not to be identified. SK already supplies batteries for Ford's new electric F-150 Lightning pickup, which was driven this week by President Joe Biden after he toured the Michigan factory where it's made.
Ford Chief Executive Officer Jim Farley has signaled for months the company would like to control its destiny in the EV market by building batteries. The risk to battery supplies became clear when SK lost a trade dispute in February with Korean rival LG Chem Ltd. that left SK facing a multi-year import ban in the U.S.
The Biden administration helped broker a settlement between the two battery makers last month that has SK paying 2 trillion won ($1.8 billion) to LG Energy Solution, a unit of LG Chem. The U.S. International Trade Commission had imposed a 10-year ban on SK battery shipments to the U.S. as punishment for destroying evidence in an intellectual property battle with LG Chem.
The import ban had threatened to complicate the roll-out of the new F-150 Lightning and Volkswagen AG's ID.4 sport utility vehicle, both due to begin production next year with batteries assembled at an SK Innovation plant in Georgia.
A Ford representative declined to comment, as did a representative of SK. Reuters reported the Ford-SK battery deal earlier.
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