Ford announced this week a series of initiatives to secure batteries and raw materials for its electrification plans. This supports a targeted global sales rate of 600,000 battery-electric vehicles by late 2023 and 2 million by the end of 2026. As part of the Ford+ Plan, it expects the compound annual growth of EVs to break past 90 percent through 2026. That’s more than double the forecasted industry growth.
The Blue Oval’s EV sales will focus on four models. Making up the bulk is the Mustang Mach-E, which Ford says will consist of 270,000 sales combined for North America, Europe, and China. Following behind that will be the F-150 Lightning at 150,000 units for North America only. The Transit EV aims to sell 150,000 units as the iconic pickup but is split between Europe and North America. Finally, a new Europe-only SUV aims to hit 30,000 initially. However, that number ramps up by 2024 due to higher production rates.
Ford Adds New Battery Chemistry
In addition to setting sales targets, Ford is expanding its battery cell portfolio. In addition to the current nickel cobalt manganese (NCM) chemistry, it’s adding lithium iron phosphate (LFP). This increases capacity for high-demand vehicles and promises minimal range loss over time. It also reduces the brand’s reliance on scarce materials like nickel to bring costs down by 10 to 15 percent.
Ford recently secured 100 percent of the 60 GWh battery capacity required to support its production goals. It also announced that Contemporary Amperex Technology, Co., Ltd (CATL) as the latest addition to its supply chain. Starting next year, the Mustang Mach-E switches to CATL’s prismatic LFP batteries with the F-150 Lightning to follow in 2024. Thanks to Ford’s flexible EV architecture, it can easily swap batteries to quickly scale with consumer demand. Ford and CATL also signed a non-binding memorandum of understanding to explore cooperation for battery supply in Europe, China, and North America
The Blue Oval’s partnerships with LG Energy Solutions and SK On also play a key role in its EV sales goal. In Europe, the former doubled production capacity to support NCM battery production for the Mach-E and E-Transit. SK On also increased its output through 2023 to support F-150 Lightning and E-Transit production from its plants in Hungary and Atlanta here in North America.
Expanded Battery Production and Material Sourcing
Ford also announced plans to localize 40 GWH of LFP battery capacity in North America by 2026. This move aims to complement the facilities in Kentucky and Tennessee included in the BlueOval SK joint venture. The company announced today that it’s working with major mining collaborators. These include Vale Canada Ltd to explore new opportunities across the EV value chain. PT Vale Indonesia and Huayou Cobalt join to investigate a three-way nickel processing project. The latter also has a separate agreement that gives Ford the rights to around 84 kilotons per annum of nickel. BHP’s Nickel West operations in Australia will also supply nickel to Ford. Additionally, it also inked non-binding MOUs with Liontown Resources and Rio Tinto for lithium supply and a potential extra source for copper.
In North America, Ford continues to localize the processing of key battery components. It signed non-binding MOUs with EcoPro BMW, Syrah Resources, SK On, and Compass minerals for several components. These include cathode production and access to lithium hydroxide, lithium carbonate, and natural graphite. A binding agreement with ioneer supports Ford’s EV production by giving them access to lithium carbonate from the former’s Rhyolite Ridge project in Nevada.
Responding to Increasing Demand
Ford’s supply chain reinvention comes as EV demand grows among consumers. In its research, the company found that the majority of buyers intending to purchase in the next two years intend to get a hybrid or EV. That’s an increase of 11 percent and 22 percent respectively versus 2022, particularly the latter. Additionally, 60 percent of U.S. fleet managers said in a Ford Pro survey that they plan to add EVs into their operations over the next two years. Leveraging the supply chain and securing the necessary materials allows Ford to stimulate demand and make EVs accessible to millions.