Ford to intensify transition to electric

US automotive giant Ford has announced a series of deals to accelerate its shift to electric vehicles, including sourcing battery capacity and raw materials from overseas.

The deals are part of Ford’s push for annual electric vehicle (EV) production rate globally to 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 CEO 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 reorganised its operations into separate units focused on EVs and gasoline-powered vehicles with Ford Model e and Ford Blue, respectively.  

The 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.

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 and BHP.

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.