Multinational Ford has been left without its own battery factory for electric cars in Europe. Oval multinational company, Korean LG and Turkish Koç canceled the construction of a mega-plant similar to the Volkswagen gigafactory in Sagunt (Valencia) due to the slow progress of the electric vehicle on the continent. The factory would be established in Turkey. The Detroit-based company also recently stopped the electrification of its Almussafes plant due to the low level of electric car sales in Europe, but assured that it is continuing its investment plans and requested assistance from the second part of Electric and Connected. Vehicle (VEC).
The failure of the Turkish project strengthens the option of PowerCo (Volkswagen’s battery subsidiary) to sell batteries to the American company for the electric cars it will produce at Almussafes. The German auto group wants its PowerCo subsidiary to become a global battery supplier. Reuters agency reported in March the existence of an agreement between Volkswagen and Ford to supply cells for 1.2 million electric cars that the American brand will produce on the MEB electric platform in Cologne.
Volkswagen initially planned for its Sagunt gigafactory to have an annual production capacity of 40 gigawatt hours (GWh), but now plans to increase this capacity to 60 GWh (from an investment of 3,000 million to 4,500 million) in order to sell to the third factory. parties.
Ford, LG and Koç announced in February that they had signed a non-binding memorandum of understanding to establish a new company through a joint venture to build and manage one of the continent’s largest automobile battery factories. The Gigafactory was planned to have a production capacity of 25 GWh in the first stage, and later this figure would be increased to 45 GWh annually. The factory in Turkey would be located near Ankara and the target was to start production in 2026.
LG is one of the main manufacturers of batteries for electric cars in the world (with a production capacity of 200 GWh) and currently supplies batteries to Ford from its factory in Poland.
The Oval multinational has maintained a close collaboration with Koç (Turkey’s main conglomerate) for six decades.
The slow increase in electric car sales also slows down major electrification projects. Volkswagen initially planned to build six 40 GWh gigafactories to produce batteries and will focus on its German plant in Salzgitter and Sagunt for now. LG, a Ford supplier since 2011, was going to double the production capacity of its battery factory in Poland but postponed this.
While canceling the giant factory he would build in Turkey with Ford and LG, Koç said, “Considering the current electric vehicle purchase rate, it is not a suitable moment for battery cell investment.” The initial idea was to lay the first stone before the end of 2023 to start production in 2026. The batteries from the Turkey factory were to be used for Ford commercial vehicles, mostly E-Transit (the electric version of the Transit minibus). . .
Despite the cancellation of the joint venture, both Ford and Koç reiterated their commitment to increasing electric vehicle production and expressed their intention to evaluate possible investments in battery cells in the future, according to the Turkish company.
Interest rates
Korean company LG also supplies batteries for electric cars to other manufacturers such as General Motors or Tesla. In October, LG warned that there would be a slowdown in revenue growth in 2024 due to global economic uncertainties affecting electric vehicle sales expectations. Manufacturers believe that the growth in electric car sales will not be as high as initially expected due to the increase in interest rates, making it difficult to sell vehicles on installments.
TWO YEARS TO START PRODUCTION AT PARC SAGUNT
Last week, PowerCo started pre-construction work on the battery factory for the Sagunt electric car. Volkswagen plans to start large-scale production in 2026. The Valencia factory will produce batteries for 800,000 vehicles per year of the German brand. The Gigafactory will supply cells to the Seat factories in Martorell (Barcelona) and the VW factories in Landaben (Navarra). In the second stage, it wants to sell the cells to third parties.