Ford set its sights on expanding its electric vehicle output today by announcing a string of deals designed to assure it maintains a steady supply of lithium, an element critical in battery production.
- Ford announced deals with Albemarle, Compass Minerals, and others for lithium deliveries, a key component in EV batteries.
- The deals are with U.S. companies, or from places that have free trade agreements so that the batteries can qualify for federal tax credits of up to $7,500.
- Ford had been working in partnership with South Korean company SK Innovations to build batteries at a Kentucky plant.
Ford (F) said Monday it has signed contracts with several mining firms to secure the lithium supplies needed to make millions of batteries. The deals are with U.S. companies, or those based in countries with free trade agreements like Canada so that the EVs can qualify for as much as $7,500 in U.S. tax credits.
The contracts are designed to help Ford achieve its goal of producing 2 million EVs by the end of 2026. The company has been working to increase market share in the EV market, and Ford CEO Jim Farley said his company became the second leading EV seller in the U.S. last year, behind Tesla (TSLA).
Ford signed a deal with the world’s largest producer of lithium for EV batteries, Albemarle (ALB), which agreed to produce more than 100,000 tons of battery-grade lithium hydroxide for Ford, enough to make approximately 3 million batteries.
"We are at a significant moment in Ford's next industrial revolution for the EV age," said Lisa Drake, Ford's vice president of EV Industrialization. "Working with strong global collaborators such as Albemarle, which has well-established operations and a proven track record of scaling facilities, helps us fortify and de-risk our plans for sourcing the key minerals we need to make EVs more accessible for our customers longer-term."
From Kansas-based Compass Minerals (CMP), Ford expects to receive 30,000 to 40,000 tons of battery-grade lithium a year from the company’s Ogden, Utah solar evaporation facility. Ford also signed an 11-year agreement with Canada’s Nemaska Lithium to supply an additional 13,000 tons of lithium yearly from its Quebec production facility.
Ford also contracted with a California producer EnergySource Minerals, which will produce lithium hydroxide at its plant in Imperial Valley using a sustainable production process that will use a fraction of the carbon, water, and land normally needed for lithium production.
Ford has been producing EV batteries with South Korean manufacturer SK Innovation. Together, the two companies have a joint battery venture in Kentucky called BlueOvalSK.
In 2022, Ford also announced a deal with the American subsidiary of Australian mining firm Ioneer Ltd. to buy 7,000 tons of lithium a year from the Rhyolite Ridge mining project in Nevada. The lithium is bound for the Kentucky facility.
Ford is not the only one in the electric vehicle industry securing lithium resources. Earlier this month, competitor Tesla broke ground on an in-house lithium refining facility in Texas, where CEO Elon Musk said it would produce enough of the metal to make a million batteries a year.
Lithium’s value in EV production has prompted some countries to nationalize their mines, including Chile earlier this year.