Form of words:
TeaHere it is again: Another automaker makes a big announcement with the battery maker about its electrification plans. As per the previous announcements, it is not only ambitious but far-fetched.
Ford Motor Company and SK Innovation Company. announced that they are partnering To spend $11.4 billion on three electric car battery plants across the US, it is the largest investment in the automaker’s 118-year history. deal To build the largest battery plant ever This would elevate the South Korean firm to the position of a leading battery manufacturer in the US and also its largest single outlay. All very big.
It comes at a time when President Joe Biden’s administration is talking Electric Vehicle SubsidyIncluding tax credit. Also, anything in the US or with high domestic content, including battery cells, would get more government support. it’s on top of a new National blueprint for lithium-ion batteriesThis is the right time for a blockbuster investment by Ford and SK. However, there is much more to consider.
Beyond the potential exploits the investment brings to companies, it’s worth taking a closer look at their plans and the batteries they’re promising. Through the 129 gigawatt-hours of battery annual production capacity they’ll build, firms are expected to produce 1 million power packs for sport utility vehicles and trucks (such as the all-electric F-150 Lightning pickup Biden recently announced). One ride.) SK’s focus is on the commercialization of high-nickel content batteries, or NCMs. Five years ago, it developed the NCM811 and now the Nickel 9 battery which is 90% nickel. This, the company says, “will be mass-produced in the US, Powering Ford’s F-150 Lightning“
For starters, this type of battery has not yet been proven to be completely safe. While SK has not registered fires related to EV batteries, power packs with high-nickel content – although they provide significant energy – are known to chemically volatile and prone to combustion. such battery forced General Motors Co. will recall every EV Bolt vehicle made since 2017, Feather $1.8 billion total cost For incorporated firms. The cars were equipped with an NCM type made by another South Korean company, LG Energy Solutions, a unit of South Korean industrial giant LG Chem Ltd.
Yet South Korean battery companies remain on this path. This means that they are not entirely cheap, safe and considered more realistic options (lithium iron phosphate, or LFP, the power packs that the Chinese are focusing on improvingThis will set them and their auto partners on a path towards their higher electrification goals, while taking advantage of subsidies offered by the administration and adherence to stricter emissions regulations. In recent months, the installation of improved LFP variants has increasingly outperformed NCM, running contrary to most of the market’s expectations and forecasts. Instead, SK Innovation recently signed a contract with EcoPro BM Co., a company that manufactures high-nickel parts (cathode and others) for batteries and 80 for NCM for 10 trillion Korean Won. supplies % to 90% nickel-content products. ($8.5 billion) starting in 2024. It will cost them.
Separately, SK has suffered some setbacks over its battery technology in the US, following trade secret disputes with LG Energy that risked the country’s ability to ramp up production. in April, companies settledSK is prepared to pay LG $1.8 billion as a one-time payment plus ongoing royalties. They have agreed to withdraw all pending legal disputes, saying they are “for the future of all US and South Korean electric vehicle battery industries.”
There is also commercial viability to consider. While these plans are ambitious, the cost of doing business is a reality. Although SK and its South Korean peers have focused on power packs with high energy densities, which are currently a technology bottleneck, these batteries are still extremely expensive and a profitable future for them is some time away. For example, SK Innovation’s battery business posted a -26.5% operating margin in 2020, but is expected to remain in the “high single-digit” range after 2025, according to analysts at Daiwa Securities Group Inc.
The high risks that must come with high risk are not immediately on offer. Bigger isn’t always better – as investors and firms should know by now.-bloomberg
Read also:
subscribe our channel youtube And Wire
Why is the news media in crisis and how can you fix it?
India needs free, unbiased, non-hyphenated and questionable journalism even more as it is facing many crises.
But the news media itself is in trouble. There have been brutal layoffs and pay-cuts. The best of journalism are shrinking, yielding to raw prime-time spectacle.
ThePrint has the best young journalists, columnists and editors to work for it. Smart and thinking people like you will have to pay a price to maintain this quality of journalism. Whether you live in India or abroad, you can Here.