DETROIT – Ford Motor plans to kind a three way partnership with South Korean battery maker SK Innovation that can ultimately manufacture battery cells for electrical autos within the U.S.

The businesses on Wednesday introduced they’ve signed a memorandum of understanding for a three way partnership that will probably be known as BlueOvalSK. Manufacturing of the battery cells in addition to properly as supporting modules is anticipated to start out by mid-decade, the businesses mentioned.

The announcement comes amid an anticipated surge in electrical automobile gross sales in addition to a push by the Biden administration to extend home manufacturing of essential applied sciences for EVs reminiscent of battery cells, which energy the autos.

“Because the business adjustments, we’ve to insource now,” Ford CEO Jim Farley informed reporters Wednesday evening through the unveiling of the automaker’s new electric F-150 Lightning pickup.

Farley in contrast it to automakers constructing their very own engines and powertrain parts within the early 1900s. He mentioned it should assist keep away from any potential future shortages just like the business is currently experiencing with semiconductor chips.

By 2030, Ford expects annual vitality demand for its autos will probably be as much as 140 GWh yearly in North America and as much as 240 GWh globally.

The creation of the three way partnership, which was first reported Wednesday by Reuters, is topic to definitive agreements, regulatory approvals and different circumstances.

In Could, CNBC first reported Ford anticipated to be promoting sufficient EVs to start manufacturing its personal battery cells by 2025.