Ford announces series of deals to accelerate EV push

Ford CEO Jim Farley attends the official unveiling of the all-new Ford F-150 Lightning Electric Pickup Truck at the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, USA on April 26, 2022. REUTERS/Rebecca Cook/File Photo

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DETROIT, July 21 (Reuters) – Ford Motor Co (FN) It announced a series of deals on Thursday to accelerate its transition to electric vehicles, including acquiring 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 reach an annual EV production rate of 600,000 vehicles worldwide by late 2023 and more than 2 million vehicles by the end of 2026. It expects the compound annual growth rate of EVs to reach 90% by 2026. More than doubling the predicted industry growth rate.

“We’re putting the industry system to scale quickly,” Ford Chief Executive Jim Farley said in a statement.

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

The Dearborn, Michigan-based company also said its EV business won’t be profitable until next-generation models begin production in 2025.

As part of its push to increase capacity, Ford said it will add lithium iron phosphate (LFP) cell chemistry for EV batteries with nickel cobalt manganese (NCM) to its portfolio. Ford says it has acquired all of the 60 gigawatt hours (GWh) of cell capacity needed to support the 600,000 run rate.

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

The company is working with LG Energy Solutions and its long-term battery partner SK Innovation.(096770.KS)

Ford says it now has 70% of the battery cell capacity needed to reach its annual production rate of more than 2 million by late 2026.

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

It has locked in lithium deals through deals with Rio Tinto, which has explored 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 to boost Rio Tinto’s aluminum business and includes a potential copper prospect.

Ford announced other battery material deals. It has signed a letter of intent with EcoPro BM and SK On, an offtake agreement for ioneer Ltd to set up a cathode manufacturing plant in North America. (INR.AX) An agreement with Compass Minerals for lithium hydroxide and lithium carbonate from Utah and an agreement with Syrah Resources to supply lithium carbonate from Nevada beyond 2025(SYR.AX) and SK Ann for natural graphite from Louisiana.

New SUV production in Europe will significantly increase to 270,000 Mustang Mach-E crossovers, 150,000 F-150 Lightning pickups, 150,000 Transit vans and 30,000 units in a push for a 600,000 EV run rate by late 2023.

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(This story corrects Rio Tinto’s aluminum business, not Ford’s in paragraph 11)

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Reporting by Ben Clayman in Detroit; Editing by Bernadette Baum

Our Standards: Thomson Reuters Trust Principles.

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