Ford Signed Series of Lithium Deals As Part of $50 Billion EV Plan

U.S. automaker Ford has signed several deals to secure supply of lithium from projects in Canada to Chile, including agreements with Albemarle, Chile’s SQM and Canada’s Nemaska Lithium. The effort to supply lithium comes as the company has announced a $50 billion plan for electric vehicles (EVs). Ford has also taken into account the U.S. Inflation Reduction Act (IRA), which includes incentives for battery manufacturing and sourcing of minerals from the U.S. and free trade partners. The availability and cost of battery materials, including nickel, cobalt and lithium, have been key concerns for years among EV makers trying to build out their electric lineups. The issue has gained more urgency in recent months due to rising competition to strike supply pacts with miners and project developers and by wild swings in raw material costs.

“The mining part is not the constraint. It’s really the processing,” Ford CEO Farley said Monday. “So turning those raw materials, especially lithium and nickel, into processed materials we can put into a slurry to make the cells themselves.”

Companies including Ford and General Motors have included prepayments or loans in recent pacts to help accelerate the development of new projects.

Ford is trying to convince investors on the advantages of its strategy to ramp up EV output to 2 milllion units by the end of 2026. The company has already locked up the lithium and cobalt supplies it requires for that expansion, Farley said.

Albemarle said Monday it will supply more than 100,000 tons of battery-grade lithium hydroxide to Ford, enough to make for about 3 million EV batteries. The deal will start in 2026 and run to 2030.

Ford also agreed a supply deal with Energysource Minerals.

The company agreed in March to take a direct stake in a battery-nickel plant under construction in Indonesia, and last year sealed a pact with Liontown Resources, the developer of an Australian lithium mine.

The processing constraints are also political, Farley said, since 80% of the processing is now done in China.

“Onshoring the processing is going to be the most important controller of cost and also politics,” Farley underlined. “Eighty percent of the processing for nickel and lithium are being done in China and we need to localize that.”

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