Ford Motor Co. says it has secured sufficient battery provide to build greater than half a million electrical automobiles yearly by late subsequent year, a quantum leap above the 27 140 battery-powered automobiles it bought within the US final year.
The automaker has signed contracts with suppliers representing 60 gigawatt hours of annual battery capability, sufficient to build 600 000 EVs a year, it mentioned in a assertion Thursday. Those suppliers embody China’s Contemporary Amperex Technology Co. Ltd., or CATL, as Bloomberg beforehand reported.
Ford additionally mentioned it has secured 70% of the battery capability it wants to build greater than 2 million EVs yearly beginning in 2026, which helps meet a objective Chief Executive Officer Jim Farley set in March.
Securing sufficient batteries to build hundreds of thousands of plug-in fashions has develop into a key aggressive battleground within the rising EV market. General Motors Co. has established a partnership with South Korea’s LG Chem Ltd. to build battery crops within the US. Ford already has a three way partnership with South Korea’s SK Innovation Co. to spend $11.4 billion on three battery factories and an EV meeting plant in Tennessee and Kentucky.
The Dearborn, Michigan-based automaker mentioned it sees EV demand worldwide rising by greater than 90% yearly by means of 2026, greater than double present business forecasts.
“We are putting the industrial system in place to scale quickly,” Farley mentioned within the assertion. “Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need.”
Ford will start utilizing cheaper lithium iron phosphate battery packs from CATL on its Mustang Mach-E fashions subsequent year and F-150 Lightning pickups in early 2024, which is able to increase output of these fashionable automobiles. Ford mentioned it has a plan to supply 40 gigawatt hours of these batteries yearly in North America in 2026, however will initially import them from China.
CATL mentioned it’s going to spend as a lot as 14 billion yuan ($2.1 billion) constructing a battery plant in Jining, in China’s Shandong province. The firm final month raised 45 billion yuan on the earth’s second-biggest inventory providing this year to assist fund its enlargement.
President Joe Biden is pouring billions into constructing an EV provide chain within the US to scale back dependence on China as geopolitical tensions between the 2 nations rise. Ford contends that to meet mushrooming demand for EVs, it should import batteries from the Chinese battery large.
“We need to scale EVs quickly in the US and that is one of the aspirations in the administration,” Lisa Drake, Ford’s vp of EV industrialization, mentioned in a name with analysts and reporters Thursday. “There is not enough battery cell capacity to meet the demand. So what we’re doing is importing some battery cell capacity to help meet that demand.”
Chasing Tesla
Farley is racing to catch EV chief Tesla Inc. because the automaker pours $50 billion into its EV enlargement technique by means of 2026. Ford is also getting ready to minimize as many as 8,000 jobs within the coming weeks to increase earnings and assist fund its EV ambitions, in accordance to folks acquainted with the plan, Bloomberg reported Wednesday.
“To move fast in this space, smaller is better. A smaller team can move faster than a larger team,” Drake mentioned when requested in regards to the job cuts. “This team moves fast and it’s because we cut out a lot of big bureaucracy.”
Ford mentioned that by late subsequent year, it expects to be constructing 270,000 Mustang Mach-Es yearly, 150,000 F-150 Lightning fashions, 150,000 Transit EV industrial vans and 30,000 models of a new electrical SUV for Europe that can “significantly ramp” in 2024.
Lithium iron phosphate battery packs, or LFPs, are extensively utilized in China, however are seen as much less highly effective than the nickel cobalt manganese batteries, or NCM, that now present juice to the Mach-E and F-150 Lightning.
Drake declined to reveal the horsepower on these fashions with LFP batteries. The longer-range variations of the Mach-E and F-150 Lightning will proceed to use NCM batteries, Ford mentioned.
“I’d love to get into this today but we really just want to focus on the capacities we’ve installed,” Drake mentioned when requested for energy specs on the Mach-E and Lightning with LFP batteries. “You’re going to hear a lot more about this, so be a bit patient with us.”
Ford’s shift to LFP chemistry displays an business push to develop EV capability whereas placing a lid on hovering battery and EV prices. Tesla introduced a related transfer final October.
The change means “you don’t have to pay as much on those cheaper models to get the battery,” mentioned Corey Cantor, EV analyst at BloombergNEF. “It frees up materials for the higher end premium or longer-range versions.”
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