Ford, GM, and Chrysler Join to Develop Battery Material
Materials for EV batteries are in high demand, but could the need actually lead to a Ford, GM, and Chrysler team-up?
An Automotive Alliance
They say two heads are better than one. Are three car companies better than one? We may soon find out. It’s not usual that three major competitors align on a joint venture, but that may be exactly what is happening.
Ford, General Motors Company, and Chrysler’s parent company, Stellantis, are all looking to create more lithium batteries to power their electric vehicles, and they may join forces to accomplish that task. Bloomberg is reporting that the Big Three are in talks with POSCO Chemical Company, from South Korea, about investing in plants that are producing EV battery materials in North America.
Car Companies Going Toward EV
Car companies all over the world are trying to find materials to make the lithium-ion batteries that are in such high demand right now. All three automakers have declared big goals in EVs and streamlining that supply chain. They’ve also invested heavily in that area on their own.
Ford plans to build plants in Kentucky and Tennessee to manufacture electrified vehicles like the Ford Maverick, Ford Mustang Mach-E, and Ford F-150 Lightning. To accomplish this, they teamed up with SK Innovation, another South Korean company. Workers will make batteries and assemble EVs at that plant. Another location, the BlueOval SK Battery Park, will be located in Tennessee, too. It’s all part of the $30 billion that Ford plans to spend on EVs by 2025.
Earlier this year Stellantis announced their 2030 strategy to sell 100% all-electric vehicles in Europe by then. That includes Chrysler, Fiat, Alfa Romeo, Jeep, Dodge, and RAM. At the forefront of Stellantis’ plan is Chrysler, which debuted the Airflow EV concept earlier this year. Though their first EV offering won’t come until 2025, Chrysler intends to introduce at least two or three new EVs by 2028. Stellantis is putting up more than $2.5 billion for a planned electric vehicle battery plant in Indiana.
GM is opening facilities in Ohio and Tennessee. Two more plants are planned to be operational in the next five years. Between 2020 and 2025, GM is slated to have invested $35 billion in electric and autonomous vehicles. They also plan to launch more than 30 EVs globally by 2025. Between the GMC Hummer EV, the Chevy Spark EV, the Cadillac CELESTIQ, the Chevy Equinox EV, and a handful of other all-EV projects, GM certainly has a lot riding on getting those precious resources. If each of these companies hopes to meet those lofty goals, they’ll need a lot more battery material. That’s where the possible POSCO partnership comes in.
What This Partnership Would Entail
POSCO Chemicals doesn’t make batteries themselves, but they do make the materials like cathodes that go into batteries. Cathodes include lithium, nickel, and iron. Currently, most of the battery making for EV batteries and battery packs comes from Asia, so aligning with a company that is familiar with that process would help Ford, GM, and Stellantis going forward.
GM actually partnered with POSCO Chemical already. Earlier in the year they announced plans to construct a North American factory in Quebec, Canada to process critical battery materials for GM’s Ultium EV platform. The facility that will process these materials is slated to open sometime in 2024. POSCO’s presence in North America doesn’t stop there, though. They’ve already begun construction on an EV parts manufacturing plant in Mexico.
The Bloomberg report indicates that POSCO, GM, Ford, and Stellantis would work together on the mining and gathering of battery materials in North America, but it’s unclear if that would lead to the construction of additional plants or if they would simply share resources from some of these facilities that are already being built.
Other Automakers, Too
Stellantis, GM, and Ford certainly aren’t the only carmakers that are electrifying their lineup. They’re also not the only brands that are discussing possible deals with POSCO Chemical. Apparently, they’re not restricting their conversations to Ford, GM, and Stellantis. They’re also talking to other automakers.
If Bloomberg’s reporting is accurate, then Ford, GM, and Chrysler could get a boost in finding the coveted resources needed to make those batteries, but what if another automaker enters an agreement with POSCO, too? Will the POSCO deal be exclusive for Ford, GM, and Stellantis if a deal is struck? Or will POSCO get involved with several automakers at the same time? It will be interesting to see what happens, or, if anything happens because this is by no means a done deal.
Possible Timeframe
People familiar with the topic apparently say the talks are preliminary, so it would take a while to get everything finalized. It may take a couple of years to really get going if and when a deal is struck. In the meantime, though, these companies are working on their own individual plants. It may not take too long to implement the plans of any possible partnership if they end up sharing resources from the plants that are already in progress. Whether they hope to build brand-new facilities or partner in other ways, any deal that’s made would likely be pushed to the top of the priority list for every company involved.
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