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Ford turns to CATL for energy storage
Ford is changing its strategy by highlighting Chinese CATL's LFP technology in energy storage systems. This move is for South Korean battery manufacturers...
Ford Motor, while turning to Chinese CATL's battery technology to grow in the energy storage systems market, has also started to convert some assets left from plans carried out with its former partner SK On to this area. This choice of the company clearly reveals the strategic shift extending from electric vehicle batteries to energy storage.
The decision came after the dissolution of the $11.4 billion BlueOval SK joint venture between Ford and SK On. In December, the two parties agreed to reassess investment plans due to weaker-than-expected electric vehicle demand, with Ford taking control of battery plants in Kentucky and the plant in Tennessee passing to SK On.
Kentucky plants shift to energy storage
Ford is repositioning its Kentucky plants not only to produce electric vehicle batteries but also for energy storage systems. In this transformation, the company's reliance on CATL's lithium iron phosphate, or LFP technology, is notable.
LFP batteries stand out especially in large-scale energy storage projects due to their long life, safety, and lower cost. Therefore, the technology finds a wide range of applications from grid-supported projects to renewable energy investments.
Ford Energy enters the field
The company recently established its subsidiary Ford Energy focused on energy storage. Ford also made its first major battery supply agreement in this field with the French energy company EDF.
It was also reported that Ford plans to invest about $1.5 billion in the energy storage business this year. Thus, the company is trying to establish a stronger position not only in automobile manufacturing but also in energy infrastructure.
China-linked technology debate in the US
Ford's closer collaboration with CATL is being closely watched as it comes at a time when Washington continues its goal to reduce dependence on China-based battery supply chains. However, Ford appears to have turned to LFP technology, which offers cost and supply advantages, to accelerate in the energy storage field.
The agreement with EDF also led to comments that Ford may have taken on some risk to secure its first major reference project in the energy storage market. The durability, safety, and cost advantages of LFP stand out as important reasons for renewable energy developers to prefer it.
South Korean manufacturers face new competition
The development means new competitive pressure for South Korean battery manufacturers in North America. Ford's agreement to supply up to 4 gigawatt-hours of LFP batteries to EDF is making CATL more visible in the US energy storage market despite political scrutiny of China-linked technology.
Industry representatives argue that competition is not limited to battery chemistry alone. Manufacturing experience, operational reliability, quality and safety management, and supply chain resilience are also cited as decisive factors in this field.
South Korean companies are also trying to capture a share of the growing energy storage demand by emphasizing China-independent supply chains for US customers and strengthening collaborations with domestic material suppliers.
The increasing power needs for artificial intelligence data centers, electric grids, and renewable energy projects are further accelerating the large-scale energy storage market. Ford's recent move is also seen as part of the effort to secure an early position in this growing market.
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