Key Points
- LG Energy Solution signed two deals with Ford to supply 109 GWh of batteries for commercial electric vehicles by 2032.
- Starting in 2026, the batteries will be produced at LGES’s Polish plant and will power Ford’s E-Transit commercial EV.
- A previously planned joint venture to build a 25 GWh battery plant in Turkey was canceled in November 2023.
- The commercial EV market, especially in Europe, is projected to grow, with 50% of vehicles battery-powered by 2030.
LG Energy Solution (LGES), South Korea’s leading battery manufacturer, has secured two significant agreements with Ford to supply 109 gigawatt-hours (GWh) of batteries for the automaker’s commercial electric vehicles (EVs). This move strengthens the partnership between the two companies as they aim to dominate the rapidly expanding global commercial EV market.
Under the new contracts, 34 GWh of batteries will be supplied between 2026 and 2030, while an additional 75 GWh will be delivered from 2027 to 2032. Starting in 2026, the batteries will be produced at LGES’s facility in Poland. These batteries are expected to power Ford’s next-generation commercial EV, the E-Transit, which plays a pivotal role in Ford’s EV lineup.
The deal comes after a previously planned joint venture between Ford and LGES in Turkey fell through. In early 2023, the two companies signed a memorandum of understanding (MOU) to build a 25 GWh battery plant near Ankara. However, the agreement was terminated in November due to concerns about the EV market transition pace and battery cell production challenges. Despite the cancellation of the joint venture, LGES reaffirmed that Ford’s commercial EV plans would remain unaffected, with batteries supplied from existing LGES plants.
The latest contracts are expected to boost LGES’s global standing by securing large-scale orders and improving the operational efficiency of its Polish plant. Commercial EV batteries are particularly challenging to manufacture due to the larger capacity requirements and the need for durability in extreme weather conditions. However, LGES believes its experience producing advanced battery technologies tailored for harsh environments will solidify its leadership in the European market.
The European commercial EV market is projected to grow rapidly in the coming years. Global consultancy LMC Automotive research forecasts that 50% of European commercial vehicles will be battery-powered by 2030. It aligns with the long-term strategy of both LGES and Ford to expand their EV footprints.
In addition to the commercial vehicle contracts, LGES will supply batteries for the Ford Mustang Mach-E at its Michigan facility starting in 2025 rather than its Polish plant. This shift is expected to leverage favorable market conditions, including tax credits under the U.S. Inflation Reduction Act.
