Ford to Use Lithium Iron Phosphate Batteries for the First Time as it Aims to Produce 600,000 EVs a Year in 2023, Sets Up Global Supply Chain
As the world's automakers make plans to produce millions of electric vehicles, sourcing the raw materials for the batteries needed to power all of these vehicles remains a high priority. It's one of the reasons that Ford Motor Co and General Motors have setup electric vehicle battery joint ventures with two of the world's leading suppliers, SK for Ford and LG Energy Solution for GM.
Now Ford says its will use new EV battery chemistries and secured contracts for 60 gigawatt hours (GWh) of annual battery capacity to deliver 600,000 EV globally by late 2023, which would make Ford the second-largest U.S.-based producer of electric vehicles behind Tesla.
Ford is adding lithium iron phosphate (LFP) cell chemistry to its portfolio for the first time, alongside its existing nickel cobalt manganese (NCM) chemistry. This will create more capacity for high-demand products, such as the F-150 Lightning and Mach E SUV. It also provides its EV customers with reliable long life batteries.
Ford said it also sourced approximately 70% of the battery cell capacity it needs to support an annual global run rate of more than 2 million EVs by late 2026.
Ford said its secured the 60 gigawatt hours (GWh) by working with leading battery companies around the globe, including the world's biggest battery producer, Contemporary Amperex Technology Co., Ltd. (CATL) in China. Other suppliers include Ford's EV battery joint venture partner SK, as well as long-time supplier LG Energy Solution (LGES).
LGES has recently doubled its capacity at its Wroclaw, Poland, EV battery facility to support incremental NCM cell production for Mustang Mach-E and E-Transit models.
CATL will provide full LFP battery packs for Mustang Mach-E models for North America starting next year, as well as for F-150 Lightning pickups in early 2024. The automaker plans to localize and use 40 GWh of LFP capacity in North America starting in 2026.
Ford and CATL have also signed a separate non-binding MOU to explore a cooperation for supplying batteries in Ford's markets across China, Europe and North America.
Ford's flexible EV architecture allows the company to efficient incorporation CATL's prismatic LFP cell-to-pack technology, delivering incremental capacity quickly to scale and meet customer demand.
Ford intends to use its additional battery capacity to complement three previously announced battery plants in Kentucky and Tennessee that are part of the "BlueOval SK", the EV battery joint venture between Ford and SK On, which was officially established on July 13.
SK On has installed additional NCM cell capacity from its earlier-planned levels at its Atlanta facility, while also adding battery cell capacity from its Hungary operation. These battery cells will be used in Ford's high-volume F-150 Lightning and E-Transits through late 2023.
Ford has signed an additional MOU with SK On and Koç Holdings to create a joint venture in Turkey for expanded battery capacity there.
Ford is Establishing a Global EV Battery Supply Chain for Raw Materials
To support its EV battery joint ventures, Ford is direct-sourcing the raw materials needed for battery production. The automaker is working with major mining collaborators and has sourced most of the nickel needed through 2026 and beyond.
"Our team has been actively engaged with partners in the United States and around the world," said Lisa Drake, Ford Model e vice president, 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."
Ford has signed non-binding MOUs with mining company Vale Canada Ltd to explore potential opportunities across the EV value chain. Vale mines nickel, copper and cobalt.
Ford also signed a non-binding MOU with PT Vale Indonesia and Huayou Cobalt for exploring a three-way nickel processing project. A separate off-take agreement with Huayou will collectively provide Ford with rights to the equivalent of 84 kilotons per annum (ktpa) of nickel.
Adding new battery chemistries also helps Ford reduce its reliance on scarce and expensive raw materials, such as nickel and cobalt. At current costs, Ford says it brings a 10 to 15% bill of material savings for the company versus NCM batteries.
Ford also signed an MOU with Australian company BHP to supply nickel from its Nickel West mining operations in Australia. The multi-year agreement could start as early as 2025 and may expand over time.
For Lithium, Ford announced it has locked several key contracts. The automaker signed a non-binding MOU with London-based Rio Tinto, which is the world's second-largest metals and mining corporation. Ford is exploring a major lithium off-take agreement from Rio Tinto's Rincon lithium mining project in Argentina.
"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," said Drake. "We are excited to work with them – and others we haven't yet announced – to build this new global supply chain for Ford."
In the U.S. Ford is working to localize processing of key battery materials. The automaker signed a non-binding MOU for lithium hydroxide from Compass Minerals and lithium carbonate from its Utah operations on the Great Salt Lake.
In addition, Australian mining company Syrah Resources and Ford's battery joint venture partner SK On signed a non-binding MOU to secure off-take for natural graphite from Syrah's processing site in Vidalia, Louisiana.
Ford also signed a binding off-take agreement with Australian company ioneer for lithium carbonate from the company's Rhyolite Ridge project in Nevada to support EV production beyond 2025.
South Korean cathode producer EcoPro BM and SK On have also signed a non-binding letter of intent with Ford to establish a cathode production facility in North America.
Ford's 600,000 global EV run rate by late 2023 including producing 270,000 Mustang Mach-Es for North America, Europe and China; 150,000 F-150 Lightning pickups for North America; 150,000 Transit EVs for North America and Europe; and 30,000 units of an all-new SUV for Europe. The run rate for Ford's European electric SUV will significantly ramp up in 2024, according to the company.
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