SK On, Ford, EcoProBM pool $887m in Quebec cathode plant

South Korean electric vehicle battery maker SK On announced Friday a joint investment of 1.2 billion Canadian dollars ($887 million) with Ford and Korean battery manufacturer EcoProBM to construct a cathode manufacturing facility in Quebec, Canada. This collaboration aims to ensure a consistent supply of cathode material for SK On and expand EcoProBM's market reach.

The facility spans 278,000 square meters and is projected for completion by 2026. Once operational, it is expected to annually produce 45,000 tonnes of cathode active material, which is essential for high-energy-density nickel-cobalt-manganese EV batteries that enable longer vehicle driving ranges between recharges.

“Through the cathode JV, the three companies can have a stable supply of battery raw materials in North America,” Sung Min-suk, SK On’s Chief Commercial Officer, said.

EcoPro CAM Canada, a local subsidiary established by EcoProBM in February, will operate the plant, the company said. EcoProBM's core shell gradient technology is expected to boost the cathodes' lifespan and performance, directly addressing EV buyers' top two concerns about battery durability and reliability, the company added.

Both SK On and Ford said they will contribute to the investment’s equity. Furthermore, the venture has garnered support from the Canadian federal and Quebec provincial governments, totaling 640 million Canadian dollars in anticipated aid.

The primary objective of this collaboration is to establish a comprehensive North American supply chain. This supply chain will integrate everything from sourcing raw materials, to manufacturing the battery components, to final electric vehicle assembly, the companies said. The establishment of such a supply chain would also potentially stabilize battery component pricing in the market.

EcoProBM will produce the cathode, SK On will produce the NCM batteries and Ford will use these batteries in their electric vehicles, notably the F-150 Lightning.

"We're excited to establish a vertically integrated battery supply chain in North America," Ford Canada CEO Bev Goodman said.

This project also aligns with the stipulations of the US' Inflation Reduction Act. Canada's cathode production benefits from its free trade agreement with the US, making it eligible for IRA core mineral tax credits.

This investment aligns with SK On's broader strategy to expand its battery material supply chain in North America, aiming to exceed an annual production capacity of 180 GWh post-2025, sufficient for approximately 1.7 million EVs.