Battery Factory Investment in Ankara Canceled! Why Didn't Koç Holding, Ford and LG Agree?
The battery cell factory investment that Koç Holding, Ford and LG were going to jointly establish in Ankara was cancelled due to developments in the electric vehicle market. Koç Holding announced in a statement to the Public Disclosure Platform that it had concluded that the timing for the battery investment was not suitable. So why was the battery factory investment cancelled, what did this investment mean for Turkey? Here are the curiosities about the battery factory investment…
Why Was the Battery Factory Investment Canceled?
Koç Holding, Ford and LG signed a letter of intent to establish a battery cell factory with a capacity of 25 GW in Ankara in February. This investment was seen as an important step in Turkey's electric vehicle production. However, Koç Holding stated in a statement to KAP on November 10, 2023 that the battery investment was cancelled. The statement included the following statements:
“In the evaluations made regarding the battery cell production investment planned to be carried out in Ankara by Ford Motor Company and LG Energy Solution with the participation of Koç Group, it was concluded that the timing for the battery investment was not suitable considering the development in the current electric vehicle penetration and the Letter of Intent (MoU) subject to our statement dated February 21, 2023 was terminated.”
In the statement, developments in the electric vehicle market were cited as the reason for the cancellation of the battery investment. These developments include low sales rates of electric vehicles, rapid change and competition in battery technology, decreasing prices of battery cells, and easier import of battery cells. These factors may have reduced the profitability and attractiveness of battery investment.
What Did the Battery Factory Investment Mean for Türkiye?
The battery factory investment was expected to play an important role in Turkey's electric vehicle production. Thanks to this investment, Turkey's dependence on electric vehicles would decrease, a domestic and national battery cell would be produced, the cost of electric vehicles would decrease and the spread of electric vehicles would be ensured. In addition, the battery factory investment would increase Turkey's energy efficiency, environmentally friendly technologies, employment and export potential.
Has Battery Factory Investment Been Completely Shelved?
The fact that Koç Holding, Ford and LG canceled their battery factory investment does not mean that this investment has been completely shelved. In Koç Holding's statement to KAP, the following statements were included:
“As Ford and Koç Holding, we will continue to support Ford Otosan's efforts to produce electric vehicles in its Kocaeli factories, and battery cell investment may be evaluated in the future depending on the developments in the electric vehicle market dynamics.”
These statements indicate that battery factory investment may come back to the agenda in the future. Developments in the electric vehicle market may affect the timing and profitability of battery investment. Therefore, battery factory investment can still be seen as an important opportunity for Turkey's electric vehicle vision.
