BlueOval SK, the battery joint venture between SK On and Ford, is facing difficulty in finalizing equipment orders as suppliers are offering their kits at higher prices than the battery maker wants, TheElec has learned.
BlueOval SK had begun placing orders in mid-November but every week there has been a failed bidding since then, sources said.
Conventionally, suppliers offer their unit prices and SK On had selected the best offer among them.
But if the offers don’t meet SK On’s terms, the bid for the week fails.
For areas where the company uses exclusive suppliers, most of the process has been smooth sailing.
However, bids are failing in assembly and back-end processes. In notching, Youil Energy Tech, Woowon Technology, and Mplus are competing.
Youil Energy Tech had been the sole supplier up to last year but Woowon Technology became a supplier earlier this year and Mplus is trying to enter SK On’s supply chain.
For packaging equipment, which is used in the assembly process, Mplus, Hana Technology, and Toptec are competing.
Toptec has been selected as the vendor for tab welding, a process done before the packaging.
BlueOval SK has finalized the supplier used for mixing, electrode, and stacking, which has been decided as Yunsung F&C, PNT, and Woowon Technology, respectively.
The other areas are facing failures in bids because suppliers are offering their kits at a higher price than SK On expected.
This is due to the increase in raw material prices and the rising cost in the US where the suppliers will need to send staff.
SK On is expected to pressure the suppliers to lower their unit price, but the company will still face an uphill battle in setting up and manufacturing in the US.
BlueOval SK is planning to spend 10.2 trillion won to build three factories with a combined annual capacity of 129GWh in Kentucky and Tennessee.