Ford announces a series of deals to accelerate the push for electric cars

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, US April 26, 2022. REUTERS / Rebecca Cook / File Photo

DETROIT, July 21 (Reuters) – Ford Motor Company (FN) On Thursday, it announced a series of deals to accelerate its transition to electric vehicles, including sourcing battery capacity and raw materials from companies such as Chinese battery maker CATL. (300750.SZ) Australian mining giant Rio Tinto (RIO.AX).

These deals are part of Ford’s drive to bring its annual production of electric vehicles globally to 600,000 vehicles by late 2023 and more than two million vehicles by the end of 2026. Ford said it expects the compound annual growth rate for electric vehicles to reach 90 percent by the end of the year. % through 2026, more than double the expected industry growth rate.

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

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

The Dearborn, Michigan, company also said at the time that its electric car business wouldn’t be profitable until next-generation models began production in 2025.

As part of its drive to boost 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 of the 60 gigawatt-hours (GWh) cell capacity needed to support the 600,000 operating rate.

The US automaker said CATL will provide complete LFP battery packs for North American Mustang Mach-E crossovers starting next year as well as F-150 Lightning trucks in early 2024.

The company also works with LG Energy Solution and longtime battery partner SK Innovation.(096770.KS)

Ford said it now has about 70% of the battery cell capacity it needs to achieve an annual production rate of more than 2 million by late 2026.

To support the battery cell deals, Ford said it’s also directly supplying raw materials for battery cells, announcing deals to get most of the nickel needed through 2026 and beyond through agreements with Vale SA units in Canada and Indonesia, and China’s Huayou Cobalt. (603799.SS) and BHP.

Ford said it has also entered into lithium contracts through agreements with Rio Tinto, to explore a “significant” purchase agreement for lithium from mining company Rincon’s project in Argentina. This is part of a multi-metal agreement that boosts Rio Tinto’s aluminum business and includes a potential opportunity on copper.

Ford announced other deals for battery materials. Signed a letter of intent with EcoPro BM and SK On to establish a cathode production plant in North America, purchase agreement for ioneer Ltd (VAT Indian Rupees) for the supply of lithium carbonate from Nevada after 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.

Driving to 600,000 EV operating rate by late 2023 includes 270,000 Mustang Mach-E crossovers, 150,000 F-150 Lightning, 150,000 transit trucks and 30,000 units of new SUVs for Europe whose production will increase dramatically in 2024.

(Ben Klayman reports in Detroit). Editing by Bernadette Baum

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