Ford announces a series of agreements to accelerate the push for electric vehicles

Ford CEO Jim Farley attends the official launch of the all-new Ford F-150 Lightning electric pickup truck at the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, U.S., April 26, 2022. REUTERS/Rebecca Cook/File Photo

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DETROIT, July 21 (Reuters) – Ford Motor Co (FN) announced on Thursday a series of agreements aimed at accelerating its shift to electric vehicles, including the supply of battery capacity and raw materials from companies such as the manufacturer Chinese battery company CATL (300750.SZ) and Australian mining giant Rio Tinto (RIO.AX).

The agreements are part of Ford’s effort to push its annual electric vehicle production rate to reach 600,000 vehicles by the end of 2023 and more than 2 million by the end of 2026. Ford said it will expects the compound annual growth rate of electric vehicles to exceed 90% through 2026, more than doubling the expected industry growth rate.

“We are putting the industry system in place to scale quickly,” Ford Chief Executive Jim Farley said in a statement.

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In March, Ford increased its planned spending on electric vehicles through 2026 to $50 billion from its previous target of $30 billion, and reorganized its operations into separate units focused on electric vehicles and vehicles. petrol with Ford Model e and Ford Blue, respectively. Read more

The Dearborn, Michigan-based company also said at the time that its electric vehicle business would not be profitable until next-generation models begin production in 2025.

As part of its efforts to increase capacity, Ford announced that it is adding lithium iron phosphate (LFP) cell chemistry for electric vehicle batteries to its portfolio, alongside nickel-cobalt-manganese ( NCM). Ford said it secured the full 60 gigawatt hours (GWh) of cellular capacity needed to support the 600,000 operating rate.

The U.S. automaker said CATL will supply complete LFP batteries for Mustang Mach-E crossovers for North America starting next year, as well as F-150 Lightning pickups in early 2024.

The company is also working with LG Energy Solution and its long-time partner SK Innovation.(096770.KS)

Ford said it has now supplied about 70% of the battery cell capacity it needs to reach its annual production rate of more than 2 million by the end of 2026.

To support the battery cell deals, Ford said it is also directly sourcing battery cell raw materials, announcing deals to acquire most of the nickel needed through 2026 and beyond through to agreements with Vale SA units in Canada and Indonesia, the Chinese Huayou Cobalt (603799. SS) and BHP.

It has also struck lithium contracts through deals with Rio Tinto, exploring a “significant” deal to remove lithium from the mining company’s Rincon project in Argentina, Ford said. It’s part of a multi-metal deal that leverages Rio Tinto’s aluminum business and includes a potential opportunity in copper.

Ford has announced other battery material offerings. It signed a letter of intent with EcoPro BM and SK On to establish a cathode production facility in North America, an off-take agreement for ioneer Ltd (INR.AX) to supply lithium carbonate from Nevada to the beyond 2025, an agreement with Compass Minerals for lithium hydroxide and lithium carbonate from Utah, and an agreement with Syrah Resources (SYR.AX) and SK On for natural graphite from Louisiana.

The move to the 600,000 EV operating rate by the end of 2023 includes 270,000 Mustang Mach-E crossovers, 150,000 F-150 Lightning pickup trucks, 150,000 Transit vans and 30,000 units of a new SUV for Europe whose production will increase considerably in 2024.

(This story corrects mention of Rio Tinto’s aluminum business, not Ford’s in paragraph 11)

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Reporting by Ben Klayman in Detroit; Editing by Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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