Ford CEO Asks Battery Suppliers to Stop Fighting

Matt Posky
by Matt Posky
ford ceo asks battery suppliers to stop fighting

Battery suppliers LG Chem and SK Innovation have what could be politely described as an intense rivalry. With the automotive industry desperate to secure reliable access to the most essential components for the planned electric vehicle offensive, chemical companies specializing in electronics are very much in demand and they’re all jockeying for power.

On Wednesday, the U.S. International Trade Commission (ITC) sided with LG Chem after it had accused SK Innovation of misappropriating trade secrets pertaining to EV battery technologies. But Ford CEO Jim Farley is asking the South Korean businesses to call a ceasefire and settle things out of court, presumably through the transfer of a large sum of money.

Ford cares because the ITC indicated that it would be issuing a limited 10-year exclusion order prohibiting SK’s ability to import certain lithium-ion batteries into the United States. But special exemptions will be made for the company to import the components necessary for their production inside the U.S. and other parts intended for Ford’s F-150 EV program over the next four years. Additional allowances will be made for Volkswagen of America’s planned MEB electric vehicle lineup, though only for two years.

That seems to give sufficient leeway for Blue Oval to get the ball rolling on the all-electric pickup. But Farley took to social media on Thursday to announce that a settlement was the only way the program could continue.

“While we’re pleased the ITC ruling makes way for @Ford to bring to market our groundbreaking electric F-150, a voluntary settlement between these two suppliers is ultimately in the best interest of US manufacturers and workers,” he wrote in response to a Washington Post article about the case.

We’ve been repeatedly confused by how willing the automotive industry has been to let other companies have near-complete control over what is inarguably the most important and valuable component for electric vehicles. In fact, it wasn’t more than two years ago that German Chancellor Angela Merkel was chastising domestic automakers for allowing themselves to become so dependent upon China, Korea, and Japan. But Ford has previously claimed there’s nothing to be gained by building a battery factory, especially considering the swift way in which the industry is currently evolving. While that leaves the company open to losing ground to the handful of automakers that are building their own cells, Ford is hardly the only automaker taking this approach.

“The supply chain has ramped up since Elon [Musk] built his Gigafactory, and so there’s plenty there that does not warrant us to migrate our capital into owning our own factory,” Ford’s last CEO, Jim Hackett, suggested during last summer’s earnings call. “There’s no advantage in the ownership in terms of cost or sourcing.”

Perhaps Hackett couldn’t foresee Ford’s battery supplier losing a court case that would place limitations on its ability to import products into the United States.

Obviously, SK Innovation is displeased with the ITC’s decision. But it issued a reminder that the 60-day presidential review gave an opportunity for President Joe Biden to reverse the ruling. Considering how obsessed the administration appears to be with transitioning toward electric vehicles and moving away from fossil fuels, we suppose there’s a chance. But it wouldn’t be clear how it would benefit America more than having the nation build its own batteries. And wasn’t the Biden-Harris ticket promising an avalanche of new jobs in the energy sector? This seems like a golden opportunity to try and make good on that promise.

[Image: JL IMAGES/Shutterstock]

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4 of 21 comments
  • El scotto El scotto on Feb 14, 2021

    Most EV aren't cheap, perhaps causing some jealousy from commenters and causing attempted derisive comments. EV are now getting cheap enough they can become the commuter beast in a two-car family. EV CARS have been covered and discussed at length on here. No one has expressed any comments on the "white paint work vehicle" armada. Delivery vans of all sizes and pick-ups will be EV's true breakthrough. In a year or two we may have fleet managers commenting on here about their work fleets.

  • El scotto El scotto on Feb 14, 2021

    Is it true that Stellantis' total EV research is some guy in Turin rubbing two magnets together and three guys near Lyon wiring up a toy train transformer? Ok, I kid but not by much. The last and the lagging in EV efforts will bought by the Chinese. Include an outside shot of Ford becoming part of the VW group.

    • See 1 previous
    • Conundrum Conundrum on Feb 15, 2021

      @SCE to AUX Stellantis is more than Fiat and Chrysler. Peugeot and Citroen make EVs and the latest Fiat EV has a 200 mile range. The world is not the USA.

  • Keith Maybe my market's different. but 4.5k whack. Plus mods like his are just donations for the next owner. I'd consider driving it as a fun but practical yet disposable work/airport car if it was priced right. Some VAG's (yep, even Audis) are capable, long lasting reliable cars despite what the haters preach. I can't lie I've done the same as this guy: I had a decently clean 4 Runner V8 with about the same miles- I put it up for sale around the same price as the lower mile examples. I heard crickets chirp until I dropped the price. Folks just don't want NYC cab miles.
  • Max So GM will be making TESLAS in the future. YEA They really shouldn’t be taking cues from Elon musk. Tesla is just about to be over.
  • Malcolm It's not that commenters attack Tesla, musk has brought it on the company. The delivery of the first semi was half loaded in 70 degree weather hauling potato chips for frito lay. No company underutilizes their loads like this. Musk shouted at the world "look at us". Freightliners e-cascads has been delivering loads for 6-8 months before Tesla delivered one semi. What commenters are asking "What's the actual usable range when in say Leadville when its blowing snow and -20F outside with a full trailer?
  • Funky D I despise Google for a whole host of reasons. So why on earth would I willing spend a large amount of $ on a car that will force Google spyware on me.The only connectivity to the world I will put up with is through my phone, which at least gives me the option of turning it off or disconnecting it from the car should I choose to.No CarPlay, no sale.
  • William I think it's important to understand the factors that made GM as big as it once was and would like to be today. Let's roll back to 1965, or even before that. GM was the biggest of the Big Three. It's main competition was Ford and Chrysler, as well as it's own 5 brands competing with themselves. The import competition was all but non existent. Volkswagen was the most popular imported cars at the time. So GM had its successful 5 brands, and very little competition compared to today's market. GM was big, huge in fact. It was diversified into many other lines of business, from trains to information data processing (EDS). Again GM was huge. But being huge didn't make it better. There are many examples of GM not building the best cars they could, it's no surprise that they were building cars to maximize their profits, not to be the best built cars on the road, the closest brand to achieve that status was Cadillac. Anyone who owned a Cadillac knew it could have been a much higher level of quality than it was. It had a higher level of engineering and design features compared to it's competition. But as my Godfather used to say "how good is good?" Being as good as your competitors, isn't being as good as you could be. So, today GM does not hold 50% of the automotive market as it once did, and because of a multitude of reasons it never will again. No matter how much it improves it's quality, market value and dealer network, based on competition alone it can't have a 50% market share again. It has only 3 of its original 5 brands, and there are too many strong competitors taking pieces of the market share. So that says it's playing in a different game, therfore there's a whole new normal to use as a baseline than before. GM has to continue downsizing to fit into today's market. It can still be big, but in a different game and scale. The new normal will never be the same scale it once was as compared to the now "worlds" automotive industry. Just like how the US railroad industry had to reinvent its self to meet the changing transportation industry, and IBM has had to reinvent its self to play in the ever changing Information Technology industry it finds it's self in. IBM was once the industry leader, now it has to scale it's self down to remain in the industry it created. GM is in the same place that the railroads, IBM and other big companies like AT&T and Standard Oil have found themselves in. It seems like being the industry leader is always followed by having to reinvent it's self to just remain viable. It's part of the business cycle. GM, it's time you accept your fate, not dead, but not huge either.