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Ford signs battery material supply deals to charge up EV output

2023-05-22T11:32:16Z

Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany September 10, 2019. REUTERS/Wolfgang Rattay

Ford Motor Co (F.N) on Monday unveiled three deals for the supply of lithium products, including lithium hydroxide, as the automaker ramps up electric vehicle (EV) production to 2 million units by the end of 2026.

Shares of the company, which is holding a “Capital markets” event later in the day, edged up about 1% before the bell.

The deals come as North American automakers race to secure supplies of battery materials to boost EV output and catch up with market leader Tesla Inc (TSLA.O) amid surging demand for environment-friendly vehicles.

The long-term deal with Canada’s Nemaska Lithium is for the supply of up to 13,000 tons of lithium hydroxide every year, while the contract with EnergySource Minerals will help Ford receive lithium hydroxide from the Imperial Valley, California site, expected to be operational in 2025.

Ford also disclosed a five-year agreement with Albemarle Corp (ALB.N) to supply more than 100,000 metric tons of battery-grade lithium hydroxide for about 3 million future Ford EV batteries.

The lithium hydroxide produced by Nemaska should help qualify Ford vehicles for consumer tax benefits under the U.S. Inflation Reduction Act, the automaker said.

Nemaska Lithium is equally owned by Investissement Québec, the economic development agency of the Québec government, and Livent (LTHM.N).

Earlier this year, Ford joined PT Vale Indonesia and China’s Zhejiang Huayou Cobalt as their new partner in a $4.5 billion nickel processing plant in Indonesia.

The deals, announced on Monday, will strengthen “Ford’s sourcing to produce two million EVs by the end of 2026 – and beyond,” at a time when doubts linger on Wall Street about the automaker’s ability to hit that target.

Ford reaffirmed its full-year guidance of $9 billion to $11 billion of adjusted earnings before interest and taxes and about $6 billion in adjusted free cash flow.

The automaker continues to expect its electric vehicle unit to lose $3 billion this year.

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