© Reuters. FILE PHOTO: An employee walks past the logo of LG Energy Solution at its office building in Seoul, South Korea, November 23, 2021. Picture taken November 23, 2021. REUTERS/Kim Hong-Ji/File Photo
By Ebru Tuncay and Heekyong Yang
ANKARA/SEOUL (Reuters) – Turkey’s Koc Holding said on Friday it revoked an earlier agreement with Ford (NYSE:) and South Korean battery maker LG Energy Solution (LGES) for a joint venture to produce battery cells for commercial electric vehicles.
The three companies signed a non-binding agreement in February to form a joint venture to create one of Europe’s biggest electric vehicle (EV) battery cell facilities near Turkey’s capital Ankara.
“Considering the current pace of electric vehicle adoption, the timing is not appropriate for a battery cell investment,” Koc Holding said in a statement to the Public Disclosure Platform (KAP).
“Ford and Koc Holding will remain committed to support electric vehicle production at Ford Otosan’s Kocaeli Plant and will evaluate potential battery cell investments in the future in line with the dynamics of the electric vehicle market,” it said.
LGES, which supplies EV batteries to Ford, General Motors (NYSE:), Tesla (NASDAQ:) and among others, said the three companies had mutually agreed to scrap the plan due to the current pace of consumer electrification adoption.
“LG Energy Solution and Ford are working together on a plan to support battery cell production for this EV from LG Energy Solution’s existing operations, extending the companies’ long-standing business relationship,” LGES said in a statement.
In October, LGES warned of slowing revenue growth in 2024 due to global economic uncertainties affecting the outlook for EV sales, joining a growing number of automakers and suppliers expressing caution about demand for EVs.
There are concerns of higher financing costs from a rise in interest rates and sputtering growth in major economies such as China and Europe will impact car buyers.
LGES has production sites in the United States, South Korea, China, Poland, Indonesia and Canada.