Ford Motor Co on Thursday announced a series of agreements to fast-track its shift to electric vehicles, involving sourcing battery capacity and raw materials from such companies as Chinese battery maker Contemporary Amperex Technology Co., Limited (CATL) and Australian leading global mining Group, Rio Tinto.
The agreements are part of Ford’s thrust to have its annual EV production rate internationally achieve a mark of 600,000 vehicles by the end of 2023 and over 2 million by late 2026. Ford stated that it foresees a compound annual growth rate (CAGR) for EVs to cover 90 percent through 2026, which will more than augment the projected industry growth ratio.
Ford Chief Executive Jim Farley said in a statement that the company is positioning the industrial system in place in order to scale swiftly.
Earlier this year, Ford increased its planned spending on EV production through 2026 to USD50 billion from a prior estimate of USD30 billion. The company also reorganised operations and created separate units to produce EVs and conventional gasoline powered vehicles, focusing on the Ford Model e, and Ford Blue respectively.
The agreements are part of a wider effort by Ford to boost its annual production rate of EVs to 600,000 vehicles by 2023, and aims to produce more than two million vehicles by 2026.
At the time, the Michigan based company has stated that its EV business would not be profitable until the production of next-gen models slated for 2025.
Ford announced that CATL would provide LFP battery packs to power the Mustang Mach-E crossover to be launched in North America next year, and also for the F-150 Lightning pick-up trucks to be launched in the beginning of 2024.
The company continues to work with LG Energy Solutions and SK Innovation, its long-term battery supplier.
In an announcement, the company said that it had already sourced almost 70 percent of the battery cell capacity required to achieve its production target of two million vehicles by 2026.
Ford plans to source raw materials directly
In an effort to supplement the deals for battery cells, the company has said that it also plans to source battery cell raw materials directly from suppliers.
In agreements signed with Rio Tinto, Ford has locked in contracts for the supply of lithium, and is looking at the possibility of a massive lithium up-take agreement from Rio Tinto’s mining project in Argentina. The company stated that it was part of a multi-faceted agreement that will complement Ford’s aluminium business and will also unlock a potential opportunity for copper.
The company has also announced a slew of other agreements for the procurement of battery materials. Ford has signed a letter of intent with SK On and EcoPro BM to set up a cathode production factory in North America. It has also signed an agreement with Compass Minerals for lithium hydroxide and lithium carbonate in Utah, in addition to an agreement with SK On and Syrah Resources to procure natural graphite in Louisiana.
The run-up to the target of producing 600,000 Evs by 2023 includes the production of 270,000 Mustang Mach-E Crossovers, 150,000 Lightning pickup trucks and 150,000 Transit vans. The plan includes production of a new SUV targeted at the European market, for which production will increase by 2024.