South Korea’s LG Energy Solution (LGES) and Ford have scrapped plans to build an electric vehicle (EV) battery plant in Turkey after their local partner Koc Holding decided to withdraw from the project.

The three companies signed a preliminary non binding agreement last February to build a battery plant in Baskent, near Ankara, with initial production capacity of 25 gigawatt hours (GWh) by 2026 with plans to expand to 45 GWh later in the decade – enough to power 500,000 EVs.

Output was to have been supplied to Ford’s Transit commercial van plant in Turkey which has capacity for 450,000 units a year sold locally exported mainly to Europe.

Koc Holdings last week said it was pulling out of the deal due to concerns over the rate of EV adoption in Europe and also the timing of the project in view of the current economic slowdown in the region.

The deal replaced an earlier agreement between Ford and SK On to build a KRW4trn battery plant in Turkey which was also scrapped last January due to rising interest rates and other costs.

LGES said it had global capacity of 200 GWh per year split between South Korea, Poland, China and the US and Koc’s decision to pull out of the deal would not affect its ability to supply Ford.

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The company said, as of the end of 2022, it had a battery order backlog from global automakers worth KRW385trn (US$291m).