Ford Motor Company announced this week it will push forward a number of deals to accelerate its electric vehicle (EV) manufacturing to keep up with global demand.
The American multinational automobile manufacturer is looking at sourcing battery capacity and raw materials to enable it to build 600,000 EVs by late 2023, with its annual EV run rate globally expected to increase to more than 2 million by the end of 2026.
As part of this, Chinese battery maker Contemporary Amperex Technology Co., Ltd (CATL) has agreed to provide Ford with full lithium-iron-phosphate (LFP) battery packs for its Mustang Mach-E models for North America next year, and the same battery packs for its F-150 Lightnings models in early 2024.
The company has now sourced roughly 70% of the battery cell capacity it needs to support its annual run rate by late 2026.
In reaching 600,000 EVs by late 2023, Ford will manufacture 270,000 Mustang Mach-Es, 150,000 F-150 Lightnings, 150,000 Transit EVs and 30,000 units of a new SUV for Europe.
Ford’s president, chief executive officer and Ford Model e president Jim Farley said as a result of the company’s EV line-up, which is attracting significant attention and demand, securing raw materials and other components was crucial.
“Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need to deliver breakthrough EVs for millions of customers,” he said.
Ford expects a compound annual growth rate for EVs to exceed 90% through 2026, more than double forecast global industry growth.
The automobile giant aims to invest over US$50 billion in EVs through 2026 in an ever-growing market with rapidly surging demand.
As part of its need to lock-in raw materials, Ford has negotiated a variety of deals with both major global miners and emerging producers.
ioneer to supply lithium
Ford’s latest attempt to secure critical materials came on Friday when it was announced a binding offtake agreement had been made with emerging lithium-boron miner ioneer (ASX: INR).
The auto giant has agreed to purchase lithium from ioneer’s Rhyolite Ridge project in Nevada.
The agreement is for an initial five-year term and Ford will purchase 7,000 tonnes a year of lithium from the project starting in 2025.
Syrah Resources enter into MoU for graphite
Another emerging lithium miner Syrah Resources (ASX: SYR) announced on Friday it had entered into a non-binding memorandum of understanding with Ford and South Korea-based SK On to evaluate a strategic arrangement, including natural graphite active anode material supply to BlueOval SK.
BlueOval SK is a joint venture between Ford and SK On, which supplies lithium-ion batteries for Ford’s EV program.
Under the MoU, Syrah, Ford and SK On will continue testing and qualifying at Syrah’s vertically integrated Vidalia AAM facility in Louisiana, while also attempting to finalise a binding offtake agreement for natural graphite.
Rio and BHP contribute towards Ford’s push
Among the global majors, mining giant Rio Tinto (ASX: RIO) has signed a non-binding global MoU to develop more sustainable and secure supply chains for battery and low-carbon materials to be used in Ford vehicles.
Under the agreement, Ford will become the first customer for Rio’s Rincon lithium project in Argentina.
Rio is advancing Rincon into production and will work with Ford toward a significant lithium offtake agreement.
Additionally, the companies will collaborate to boost the supply of low carbon aluminium for use in Ford vehicles, including metal produced using the zero carbon ELYSIS™ smelting technology.
The world’s largest mining company BHP (ASX: BHP) has also entered into a MoU with Ford. Ford will source nickel from BHP’s Nickel West operations in WA.
Nickel West is considered to produce some of the most sustainable and lowest carbon intensity nickel in the world.
The multi-year nickel supply agreement could start as early as 2025 and may involve additional commodities over time.
Liontown and Lake commit to offtake agreements
Late last month, Liontown Resources (ASX: LTR) announced an offtake agreement with Ford, which prompted Liontown’s board to approve the development of its Kathleen Valley lithium project in Western Australia.
Ford aims to purchase 150,000tpa of spodumene from Kathleen Valley for five years, commencing in 2024.
Meanwhile, emerging lithium brine developer Lake Resources (ASX: LKE) reported a non-binding offtake MoU for its Kachi operation with Ford in April.
Ford proposes to purchase about 25,000tpa of lithium chemicals from Lake’s Kachi lithium brine project in Argentina.
Lake is developing Kachi with a focus on the highest ESG compliance using Lilac Solutions’ disruptive lithium extraction technology, which is based on its proprietary ion-exchange process.
Compared to conventional brine processing, the Lilac technology is lower cost, generates higher lithium recoveries and has a much smaller environmental footprint, including returning any unused brine to its source.