Ford announces series of deals to accelerate EV push (updated)

Ioneer

21/07/2022 12:49

(Adds details)
    By Joseph White and Ben Klayman
    DETROIT, July 21 (Reuters) - Ford Motor Co  F.N  on Thursday
announced a series of deals to accelerate its shift to electric
vehicles, including sourcing battery capacity and raw materials
from such companies as Chinese battery maker CATL  300750.SZ 
and Australian mining giant Rio Tinto  RIO.AX . 
    The deals are part of Ford's push to have its annual EV
production rate globally reach 600,000 vehicles by late 2023 and
more than 2 million by the end of 2026. Ford said it expects a
compound annual growth rate for EVs to top 90% through 2026,
more than doubling the forecast industry growth rate.
    "We are putting the industrial system in place to scale
quickly," Ford Chief Executive Jim Farley said in a statement.
    In March, Ford boosted its planned spending on EVs through
2026 to $50 billion from its prior target of $30 billion, and
reorganized its operations into separate units focused on EVs
and gasoline-powered vehicles with Ford Model e and Ford Blue,
respectively.  urn:newsml:reuters.com:*:nL4N2V52YG
    The Dearborn, Michigan-based company also said at the time
that its EV business would not be profitable until the
next-generation models begin production in 2025.  
    As part of its push to boost capacity, Ford said it is
adding lithium iron phosphate (LFP) cell chemistry for EV
batteries to its portfolio, alongside nickel cobalt manganese
(NCM). Ford said it has secured all of the 60 gigawatt hours
(GWh) of cell capacity needed to support the 600,000 run rate.
    The U.S. automaker said CATL will provide full LFP battery
packs for the Mustang Mach-E crossovers for North America
starting next year as well as the F-150 Lightning pickups 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 sourced about 70% of the battery cell
capacity it needs to achieve its annual production rate of more
than 2 million by late 2026.
    To support the battery cell deals, Ford said it is direct
sourcing battery cell raw materials as well, announcing deals to
acquire most of the nickel needed through 2026 and beyond
through agreements with Vale SA's units in Canada and Indonesia,
China's Huayou Cobalt  603799.SS  and BHP  BHP.AX .
    It has also locked in lithium contracts through agreements
with Rio Tinto, exploring a "significant" lithium off-take
agreement from the mining company's Rincon project in Argentina,
Ford said. That is part of a multi-metal agreement that
leverages Ford's aluminum business and includes a potential
opportunity on copper.
    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, 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 an agreement for
Syrah Resources SYR.AX  and SK On for natural graphite from
Louisiana.  
    The drive to the 600,000 EV run rate by late 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 significantly increase in 2024.

 (Reporting by Ben Klayman in Detroit
Editing by Bernadette Baum)
 ((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))