Ford CEO Jim Farley attends the official launch of the 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 its shift to electric vehicles, including sourcing battery capacity and raw materials from companies such as the manufacturer Chinese battery maker CATL (300750.SZ) and Australian mining giant Rio Tinto (RIO.AX).
The deals are part of Ford’s push for its annual global production rate of electric vehicles to reach 600,000 vehicles by the end of 2023 and more than 2 million by the end of 2026. Ford said it expects the rate of compound annual growth of electric vehicles to exceed 90% until 2026. more than double the expected growth rate of the sector.
“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 raised 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 gasoline vehicles with Ford Model 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 push 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 operating speed.
The American automaker said CATL will provide complete LFP battery packs for Mustang Mach-E crossovers for North America starting next year, as well as F-150 Lightning pickup trucks in early 2024.
The company is also working with LG Energy Solution and its long-time battery partner SK Innovation.(096770.KS)
Ford said it has now obtained 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 raw materials, announcing agreements to procure most of the nickel needed through 2026 and beyond through agreements with units of Vale SA in Canada and Indonesia, China Huayou Cobalt (603799. SS) and BHP.
It has also locked in lithium contracts through deals with Rio Tinto, exploring a “major” lithium gathering deal from the mining company’s Rincon project in Argentina, Ford said. This is part of a multi-metal deal that leverages Rio Tinto’s aluminum business and includes a potential copper opportunity.
Ford announced other battery material deals. It signed a letter of intent with EcoPro BM and SK On to establish a cathode production plant in North America, a purchase agreement for ioneer Ltd ( INR.AX ) to supply Nevada lithium carbonate beyond 2025 , a deal 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 run rate of 600,000 EVs 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, the production of which will increase significantly.
(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.