Ford announces series of deals to accelerate EV push

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 deals to accelerate the transition to electric vehicles, including purchasing battery capacity and raw materials from companies such as Chinese battery maker CATL ( 300750.SZ ) and Australian mining giant Rio Tinto (RIO.AX).

The deals are part of Ford’s push to get its annual production rate of electric vehicles globally to reach 600,000 vehicles by the end of 2023 and more than 2 million by the end of 2026. Ford said it expects a compound annual growth rate for electric vehicles to peak 90% through 2026, more than doubling the projected growth in the industry.

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

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

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

As part of efforts to increase capacity, Ford said it is adding lithium iron phosphate (LFP) cell chemistry for EV batteries to its portfolio, along with nickel cobalt manganese (NCM). Ford said it has secured all 60 gigawatt-hours (GWh) of cell capacity needed to support the 600,000-mile run.

The American automaker said CATL will supply full LFP battery packs for Mustang Mach-E crossovers for North America starting next year, as well as the F-150 Lightning pickups in early 2024.

The company also collaborates with LG Energy Solution and its long-standing battery partner SK Innovation.(096770.KS)

Ford said it has now sourced about 70% of the battery cell capacity it needs to achieve 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 sourcing battery cell raw materials directly, announcing deals to source most of the nickel needed through 2026 and beyond through deals with Vale SA’s units in Canada and Indonesia, China’s Huayou Cobalt (603799). SS) and BHP.

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

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

The drive for 600,000 electric vehicles by the end of 2023 includes 270,000 Mustang Mach-E crossovers, 150,000 F-150 Lightning pickups, 150,000 Transit vans and 30,000 units of a new SUV for Europe, whose production will increase significantly in 2024.

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

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Reporting by Ben Klayman in Detroit; Editing by Bernadette Baum

Our standards: Thomson Reuters Trust Principles.

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