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DETROIT, July 21 (Reuters) – Ford Motor Co ( FN ) announced on Thursday a series of deals 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 have its annual global EV production rate 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’re putting the industrial system in place to scale quickly,” Ford Chief Executive Jim Farley said in a statement.
In March, Ford increased its planned spending on EVs through 2026 to $50 billion from an earlier 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. read more
The Dearborn, Michigan-based company also said at the time that its EV business would not be profitable until production of next-generation models began 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, along with nickel cobalt manganese (NCM). Ford says it has secured all 60 gigawatt hours (GWh) of cell capacity needed to support the 600,000 run rate.
The US automaker said CATL will supply full LFP battery packs for Mustang Mach-E crossovers for North America starting next year as well as the F-150 Lightning pickup in early 2024.
The company is also working with LG Energy Solution and its long-time battery partner SK Innovation.(096770.KS)
Ford says it has now acquired 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 also sourcing battery cell raw materials directly, announcing deals to source most of the nickel needed through 2026 and beyond through of agreements with units of Vale SA in Canada and Indonesia, China’s Huayou Cobalt (603799. SS) and BHP .
It is also locked into lithium contracts through agreements with Rio Tinto, which is exploring a “significant” deal to off-take lithium from the Argentine mining company’s Rincon project, Ford said. . That is part of a multi-metal deal that leverages Rio Tinto’s aluminum business and includes a potential copper opportunity.
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 after 2025, a 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 a 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 the new SUV for Europe with production ramping up significantly in 2024.
(This story corrects mention of Rio Tinto’s aluminum business, not Ford in paragraph 11)
Ben Klayman reporting in Detroit; Editing by Bernadette Baum
Our Standards: The Thomson Reuters Trust Principles.
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