Ford maintains its goal of building two million EVs annually by 2026 and says it has secured 90% of the necessary nickel and lithium.
Ford yesterday reiterated plans to reach an annual production run rate of two million EVs by the end of 2026 at its capital markets day event for investors and the media, announcing it has locked up 90 percent of the nickel and lithium needed to support that goal.
The automaker also stood by its goal to achieve 8 percent margins on its EVs by 2026, driven by volume growth, design improvements, and savings from insourcing battery technologies. Ford Chief Financial Officer John Lawler said the Model e EV and software business unit will sell about 1.2 million EVs in the US annually by then.
During the May 22 event, Ford acknowledged that it faces a challenge to slash $7 billion in costs and regain credibility on Wall Street. The carmaker estimated its total costs are $7 billion higher than its competition, mostly within the Ford Blue ICE division, according to Reuters.
“You’re not going to believe us until we start delivering it. Because we’ve told you this before. That’s the truth. We have and we haven’t delivered. So we have to prove it. We can talk about it, but we have to prove it.”
Ford Chief Financial Officer John Lawler
Ford CEO Jim Farley admitted that the company is “far behind on waste and cost.” Still, it is working to change that. He revealed that top execs now dedicate one Tuesday per month to focus specifically on material and supplier cost-cut opportunities, Automotive News reported. “I’m starting to see an excitement around waste elimination; it’s not task-assigned,” he said.
Gallery: Ford BlueOval City in Tennessee
In addition, Ford unveiled new supply deals for battery-grade lithium yesterday, marking an expanded bet on direct lithium extraction (DLE) technology, which is aimed at revolutionizing how the metal is produced for the EV industry.
As part of the new deals, Albemarle Corp and Nemaska Lithium will supply lithium hydroxide, a primary ingredient in the cathode of lithium-ion batteries, over five and 11 years respectively.
Albemarle will supply more than 100,000 metric tons of lithium hydroxide, enough for about 3 million future Ford EV batteries, the companies said. Ford and Albemarle signed a five-year agreement starting in 2026.
As for Nemaska, it will supply 13,000 tons of lithium hydroxide per year over an 11-year period for a total of 143,000 tons. Ford said the lithium hydroxide produced by Nemaska should help qualify its vehicles for consumer tax benefits under the US Inflation Reduction Act.
According to Ford Model e Vice President of Industrialization Lisa Drake, the agreements pose significantly less risk that relying on investments in junior producers. She also said the EV battery supply chain is “not necessarily a constraint,” with Erica Rannestad, who leads Ford’s lithium team, adding that time will be the real bottleneck, according to Electrek.
Source: Ford Motor Company via Reuters, via Automotive News,
via Electrek
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