Koc Holding revokes pact with Ford, LG Energy Solution for Turkey battery JV (updated)

Ford Otomotiv Sanayi AS

10/11/2023 22:20

(Adds LGES statement, background in paragraphs 5-9)
    By Ebru Tuncay and Heekyong Yang
       ANKARA/SEOUL, Nov 10 (Reuters) - Turkey's Koc Holding
 KCHOL.IS  said on Friday it revoked an earlier agreement with
Ford  F.N  and South Korean battery maker LG Energy Solution
(LGES)  373220.KS  for a joint venture to produce battery cells
for commercial electric vehicles.
    The three companies signed a non-binding agreement in
February to form a joint venture to create one of Europe's
biggest electric vehicle (EV) battery cell facilities near
Turkey's capital Ankara.
    "Considering the current pace of electric vehicle adoption,
the timing is not appropriate for a battery cell investment,"
Koc Holding said in a statement to the Public Disclosure
Platform (KAP).
    "Ford and Koc Holding will remain committed to support
electric vehicle production at Ford Otosan's  FROTO.IS  Kocaeli
Plant and will evaluate potential battery cell investments in
the future in line with the dynamics of the electric vehicle
market," it said.
    LGES, which supplies EV batteries to Ford, General Motors
 GM.N , Tesla  TSLA.O  and among others, said the three
companies had mutually agreed to scrap the plan due to the
current pace of consumer electrification adoption. 
        "LG Energy Solution and Ford are working together on a
plan to support battery cell production for this EV from LG
Energy Solution’s existing operations, extending the companies’
long-standing business relationship," LGES said in a statement. 
  
        In October, LGES warned of 
    slowing revenue growth in 2024
     due to global economic uncertainties affecting the outlook
for EV sales, joining a growing number of automakers and
suppliers expressing caution about demand for EVs. 
  
        There are concerns of higher financing costs from a rise
in interest rates and sputtering growth in major economies such
as China and Europe will impact car buyers.
  
        LGES has production sites in the United States, South
Korea, China, Poland, Indonesia and Canada. 
  
    

 (Reporting by Ebru Tuncay in Ankara and Heekyong Yang in Seoul,
Writing by Huseyin Hayatsever; Editing by Chizu Nomiyama and
Diane Craft)
 ((Huseyin.Hayatsever@reuters.com;))