Ford Motor Co. in Dearborn today announced a series of initiatives for sourcing battery capacity and raw materials that will move the automaker closer to its targeted annual run rate of 600,000 electric vehicles (EVs) by late 2023, and more than 2 million by the end of 2026.
The company detailed its global vehicle portfolio plans supporting these production goals as part of its Ford+ plan. Ford expects a compound annual growth rate for EVs to exceed 90 percent through 2026, more than double forecasted global industry growth.
“Ford’s new electric vehicle lineup has generated huge enthusiasm and demand, and now we are putting the industrial system in place to scale quickly,” says Jim Farley, Ford’s president and CEO and president of Ford Model e. “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.”
Ford plans to invest more than $50 billion in EVs through 2026, targeting total company adjusted EBIT margins of 10 percent and 8 percent EBIT margins for EVs by 2026.
As Ford creates a new EV supply chain that upholds its commitments to sustainability and human rights, the company continues to plan for more than half its global production to be EVs by 2030 and achieving carbon neutrality globally no later than 2050.
Ford plans to reach a 600,000 global EV run rate by late 2023 with the following EVs:
- 270,000 Mustang Mach-Es for North America, Europe, and China
- 150,000 F-150 Lightnings for North America
- 150,000 Transit EVs for North America and Europe
- 30,000 units of an all-new SUV for Europe, whose run rate will significantly ramp in 2024
Ford is adding lithium iron phosphate (LFP) cell chemistry to its portfolio, alongside its existing nickel cobalt manganese (NCM) chemistry. This creates even more capacity for high-demand products and provides customers many years of operation with minimal range loss. It also reduces the reliance on scarce critical minerals such as nickel and, at current costs, brings a 10 to 15 percent bill of material savings for Ford versus NCM batteries.
The company confirmed it has secured 100 percent of the annual battery cell capacity needed — 60 gigawatt hours (GWh) — to support this 600,000 EV run rate by working with leading battery companies around the globe.
Ford also announced Contemporary Amperex Technology Co. (CATC) will provide full LFP battery packs for Mustang Mach-E models for North America starting next year as well as F-150 Lightnings in early 2024. Ford’s EV architecture flexibility allows efficient incorporation of CATC’s prismatic LFP cell-to-pack technology, delivering incremental capacity quickly to scale and meet customer demand.
In addition, Ford is leveraging its long-standing connection with LG Energy Solution (LGES) and its strategic relationship with SK On to meet its battery capacity target for late 2023.
Long-time supplier LGES has scaled quickly and doubled its capacity at its Wroclaw, Poland, facility to support incremental NCM cell production for Mustang Mach-E and E-Transit models.
Plus, SK On has installed capacity to support the scaling of Ford’s high-volume F-150 Lightning and E-Transits through late 2023 — scaling NCM cell production beyond earlier-planned levels from its Atlanta facility and providing new battery cell capacity from its Hungary operation.
Ford also announced it plans to localize and use 40 GWh of LFP capacity in North America starting in 2026.
The company intends to use this additional capacity to complement three previously announced battery plants in Kentucky and Tennessee that are part of the BlueOval SK joint venture between Ford and SK On, which was officially formed last week. Ford has signed an additional MOU with SK On as well as Koç Holdings to create a joint venture in Turkey for expanded battery capacity there.
“Our team has been actively engaged with partners in the United States and around the world,” says Lisa Drake, Ford Model e vice president of EV Industrialization. “We will move fast in the key markets and regions where critical supplies are available, meeting with government officials, mining companies and processors and signing MOUs and agreements that reflect Ford’s ESG expectations and underpin Ford’s plan to bring EVs to millions.”
EV sales have been on the rise, but represent around 5 percent of annual sales. Factors holding the market back include long battery charging times, too few charging stations, high prices, electric grid limitations, sourcing of raw battery materials from child labor, and other challenges.
To support its joint ventures, Ford is direct-sourcing battery cell raw materials as well. The company announced it is working with major mining collaborators and has sourced most of the nickel needed through 2026 and beyond. Ford has signed non-binding MOUs with:
- Vale Canada Ltd. — To explore potential opportunities across the EV value chain.
- PT Vale Indonesia and Huayou Cobalt — For exploring a three-way nickel processing project and, separately, an off-take agreement with Huayou that collectively will provide Ford with rights to the equivalent of 84 kilotons per annum (ktpa) of nickel.
- BHP — For nickel supply from BHP’s Nickel West operations in Australia. The targeted multi-year agreement could start as early as 2025 and may involve additional commodities over time.
Ford also has locked several key lithium contracts. Beyond the recently announced key asset in Western Australia secured through Liontown Resources, Ford also has signed a non-binding MOU with Rio Tinto, exploring a significant lithium off-take agreement from its Rincon project in Argentina. This is part of a multi-metal MOU that leverages the scale of Ford’s aluminum business and includes a potential opportunity on copper.
Ford also continues working to localize processing of key battery materials in North America. To that end, the company is announcing:
- EcoPro BM and SK On have signed a non-binding Letter of Intent with Ford to establish a cathode production facility in North America.
- Ioneer has signed a binding off-take agreement with Ford for lithium carbonate from ioneer’s Rhyolite Ridge project in Nevada to support EV production beyond 2025.
- Compass Minerals has signed a non-binding MOU for lithium hydroxide and lithium carbonate from its Utah operations on the Great Salt Lake.
- Syrah Resources and SK On have signed a non-binding MOU to secure off-take for natural graphite from its processing site in Vidalia, Louisiana.
“It’s a very competitive landscape. These collaborators see value in the strong demand we have created with exceptional products like Mustang Mach-E and F-150 Lightning and the stability we can bring to these relationships,” says Drake. “We are excited to work with them — and others we haven’t yet announced — to build this new global supply chain for Ford.”
