Ford has presented a new and ambitious strategic plan that will allow it to guarantee the supply of batteries and, therefore, be able to increase its production capacity for electric cars. The company’s short-term goal is to reach 600,000 electric vehicles produced globally by the end of 2023.
Ford is ready to accelerate its process of electrification and transition to sustainable mobility. The important colossus of the American automotive industry has presented in society a new and ambitious strategic plan. Ford has announced a series of initiatives for the supply of battery capacity and raw materials that pave the way to reach the goal of achieve an annual production of 600,000 electric vehicles by the end of 2023. A figure that should exceed 2 million units by the end of 2026.
In the incipient era of the electric car, it is of vital importance for manufacturers to be able to ensure the supply of batteries. And it is that, without this crucial and strictly necessary component, it would be impossible to increase the production capacity of vehicles. Ford is aware of this and has therefore established this new roadmap.
Ford’s new electric vehicle supply chain
The Blue Oval brand has also detailed its global vehicle portfolio plans to support these production targets as part of the Ford plan+. The manufacturer expects the compound annual growth rate of electric vehicles to exceed 90% until 2026, more than double the expected growth in the global industry.
Ford will launch a investment of approximately 50,000 million euros in electric vehicles between now and 2026. An investment that aims to obtain profit margins before interest and adjusted taxes of 10% for the entire company and 8% for electric vehicles.
The company continues to plan for more than half of its global production to be electric vehicles by 2030 and for global carbon neutrality to be achieved by 2050 at the latest. a new supply chain.
Make Ford a 100% electric brand in Europe by 2035
Focusing on Europe, Ford is currently undergoing a major upgrade process at its production center in Cologne, Niehl, Germany, to prepare for electric vehicle production from 2023. Facility upgrades include the construction of a new 2,500-square-meter building that will house the new pre-coating line on five floors.
The first electric passenger car is scheduled to roll off the production line in Cologne next year, with a second electric model to be built from mid-2024. The new plant will have an annual production capacity of 200,000 vehicles. This factory will be, together with the one in Almussafes, in Valencia (Spain), crucial to making Ford a fully electric brand in Europe in 2035.
Ford will increase its global electric vehicle production capacity
The global electric vehicle production plans have set the mark of 600,000 units by the end of 2023. A figure that must be reached with the following models:
- Ford Mustang Mach-E. 270,000 units for North America, Europe and China.
- Ford F-150 Lightning. 150,000 units for North America.
- Ford E-Transit. 150,000 units for North America and Europe.
- Ford New SUV. 30,000 units for Europe.
Ford reduces reliance on critical and scarce minerals
Another important measure included in this new roadmap has to do with the chemistry used in electric vehicle batteries. Ford is adding lithium iron phosphate (LFP) cell chemistry to its portfoliotogether with the existing chemistry of nickel-cobalt-manganese (NCM). This strategic move is crucial to reduce reliance on critical and scarce minerals like nickel and, at current costs, save up to 15% on Ford’s bill of materials versus NCM batteries.
Ford claims to have secured 100% of the required annual battery cell capacity (60 GWh) to support this operating rate of 600,000 electric vehicles. For it will work together with the main battery companies around the world. CATL (Contemporary Amperex Technology) will provide LFP batteries for the Mustang Mach-E and the F-150 Lightning.
The brand will also leverage its connection with LGES (LG Energy Solution) and its relationship with SK On to meet the battery capacity target by the end of 2023. LGES will support the production of the models Mustang Mach-E and E-Transit. And as for SK On, it will support the scale-up of production of the F-150 Lightning and E-Transit.
Video test of the Ford Mustang Mach-E, a popular electric car
Reach 2 million electric vehicles in 2026
By the year 2026 Ford should have reached an annual production rate of more than 2 million units. The forecast to locate and use 40 GWh of LFP capacity in North America starting in 2026 has also been announced. Furthermore, the company intends to use this additional capacity to complement three previously announced battery plants in Kentucky and Tennessee that are part of the BlueOval SK joint venture between Ford and SK On. The brand has also signed an additional memorandum of understanding with SK On and Koç Holdings to establish a joint venture in Turkey to expand battery capacity in that country.
Ford is working with major mining partners and has got most of the nickel it will need until 2026. These are the non-binding memoranda of understanding that have been signed:
- Okay Canada. Exploit potential business opportunities throughout the electric vehicle value chain.
- PT Vale Indonesia and Huayou Cobalt. Exploit a three-tier nickel processing project and, separately, a purchase agreement with Huayou that together will provide Ford with rights to the equivalent of 84 kilotonnes per year of nickel.
- BHP. Nickel supply from BHP operations in Australia. The planned multi-year agreement may start as early as 2025 and include other raw materials over time.
Last but not least, Ford continues to work to localize the processing of key materials for batteries in North America. That is why the company is announcing the following non-binding agreements and/or memorandums of understanding:
- EcoPro BM and SK One. Signed a non-binding letter of intent with Ford to establish a cathode production plant in North America.
- Ioneer. Established a binding purchase agreement with Ford for lithium carbonate from ioneer’s Rhyolite Ridge project in Nevada to support vehicle production beyond 2025.
- Compass Minerals. Signed a non-binding memorandum of understanding for lithium hydroxide and lithium carbonate from its Utah operations in the Great Salt Lake.
- Syrah Resources and SK One. A non-binding memorandum of understanding has been signed to secure the purchase of natural graphite from its processing site in Vidalia, Louisiana.
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