Updated at 10:10 am EST
Ford Motor Co. (F) - Get Free Report shares edged higher Monday after the carmaker agreed a memorandum of understanding with South Korea's SK On and Turkey's Koc Holding to develop an electric vehicle batter plant in southeastern Europe.
Ford also extended its EV production partnership with Volkswagen, with plans to double the number of cars made on the German group's modular electric-drive platform (MEB) to around 1.2 million units over the next six years.
“Profitability and speed are now crucial for finally achieving the breakthrough of e-mobility in Europe. We are tackling both together with Ford," said Volkswagen's Thomas Schmall. "Today’s agreement will further accelerate the electrification of the two companies. This is also proof of the strengths of the MEB, which provides a unique package of high-tech, competitive costs and speed in implementing projects. The electric platform is thus the ideal solution for companies looking to speed up their electrification.”
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Ford shares were marked 0.7% higher in early Monday trading to change hands at $16.15 each, a move that would extend the stock's two-month decline to around 36%.
Ford's new EV battery plant, set to begin operations in 2025, will produce between 30 to 45 gigawatt hours of batter power, the companies said, and augment SK's existing operations in the U.S., China and South Korea.
Ford said earlier this month that it will boost its planned EV investment total by two thirds, to $50 billion, and run its legacy combustion engine business separately from its electrified division as the carmaker aims to capture around a third of the world's annual EV production by 2026.
Weaker-than-expected fourth quarter profits, however, as well as ongoing supply-chain and production disruptions, have tested investor patience for its ambitions to challenge Tesla's (TSLA) - Get Free Report electric car dominance.
CFO John Lawler told investors on a conference in late January that "supply constraints to remain fluid throughout the year, reflecting a variety of factors, including semiconductors and Covid", adding that the carmaker expects commodity headwinds of around $1.5 billion, as well as "other inflationary pressures, which will impact a broad range of costs."