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  3. Ford reveals its updated battery supply strategy

Ford reveals its updated battery supply strategy

Ford reveals its updated battery supply strategy

Ford has announced a series of raw material sourcing initiatives for battery production in response to the high demand for its new electric vehicles. These initiatives show the company is well on its way to meeting its goal of selling 600,000 EVs by the end of 2023 and over 2 million by the end of 2026.

As part of its Ford+ strategy, the corporation laid out its global ambitions for the portfolio of vehicles that support these production goals. By 2026, Ford predicts the yearly growth rate of electric cars will be over 90%, which is twice as fast as the worldwide industry experts.
 
Ford's new range of electric vehicles has generated significant excitement and demand, and we are now implementing the industrial system to scale swiftly," stated Jim Farley, president of Ford and CEO of Ford Model e. Thanks to the quick, focused, and creative work of the Model e team, they got the batteries and raw materials needed to make cutting-edge electric cars for millions of customers.
 
Ford wants to spend more than $50 billion on electric vehicles by 2026 so that the company's adjusted EBIT margins are 10 percent and the EBIT margins for electric cars are 8 percent.
 
By 2030, more than half of Ford's cars worldwide are expected to be electric. The company also wants to have a carbon-neutral global footprint by 2050 as it builds a new supply chain for electric cars that meets its sustainability and human rights commitments. To get ready to start producing electric vehicles in 2023, the Ford Niehl plant in Cologne, Germany, is undertaking extensive renovations. A new 25,000-square-foot structure is part of this plan. Also, the existing production facilities will be updated with new technologies that use less energy. This will save over 2,600 MWh of power annually and cut CO2 emissions by over 2,000 tons.
 
The first production-ready electric passenger vehicle is scheduled to leave the Cologne plant in 2023, with a second EV model set to enter production in the middle of the following year. The new plant will have the capacity to produce 200,000 vehicles each year.
 
Ford's goal is to have its European facilities, logistics, and suppliers have a carbon-neutral footprint by 2035, and the restoration of the Niehl factory represents a big step in that direction.
In addition to the nickel-cobalt-manganese (NCM) batteries currently available, Ford also offers lithium-ion-phosphate (LFP) batteries. The result is an increased production capacity for in-demand goods and a longer service life for the customer with minimal disruption to their independence. The use of nickel and other critical rare minerals is reduced, and material savings of 10-15% are achieved over NCM batteries at current prices.

The company has teamed up with many global industry leaders to get the full 60 GWh battery capacity needed to sell 600,000 electric vehicles each year.
 
Starting in 2020, Ford will have Contemporary Amperex Technology Co., Ltd. (CATL) supply entire LFP battery packs for North American Mustang Mach-E models and F-150 Lighting beginning in early 2024.
 
Ford's EV design is flexible enough to efficiently work with CATL's prismatic LFP technology. This lets the company overgrow and meet customer needs.
 
Ford is taking advantage of its long-term relationship with LG Energy Solution (LGES) and its strategic ties with SK On to reach its goal of delivering batteries by the end of 2023.
 
So that they could keep up with the increased demand for NCM cells used in the production of the Ford Mustang Mach-E and Ford E-Transit models, their supplier, LGES, quickly quadrupled the size of their factory in Wroclaw, Poland.
 
Also, SK On has already put in place the capacity to support production growth for the F-150 Lightning and E-Transit through the end of 2023. This means that NCM cell production at its Atlanta facility will be higher than planned, and production capacity at its Hungarian factory will also be higher.
Ford depends on the agreements to help it sell 600,000 electric vehicles by the end of 2023. To enable global sales of over two million electric cars by the end of 2026, the company has secured roughly 70% of the battery capacity required.
 
To deliver batteries to Ford's markets in China, Europe, and North America, Ford and CATL, the world's largest battery maker, have signed a non-binding memorandum to explore cooperation.
 
Additionally, Ford has stated that it will be producing 40 GWh of LFP battery capacity in North America by 2026. Ford has also finalized many significant contracts for lithium. Ford has inked a non-binding memorandum of understanding (MOU) with Rio Tinto to explore a comprehensive agreement to take lithium from Rio's Rincon project in Argentina, in addition to the previously announced key asset in Western Australia through Liontown Resources. It's part of an MOU covering many metals and could lead to a copper possibility for Ford.

EY reports that, for the first time, most car buyers intending to purchase in the next two years say they would select an electric or hybrid vehicle, up 11% from last year and 22% from 2020. This growth is primarily attributable to sales of all-electric cars.
 
Sixty percent of U.S. fleet managers polled by Ford Pro who run businesses without any electric vehicles said they plan to buy and deploy them within the next two years.

The Ford F-150 Lightning and Ford Mustang Mach-E have been well received by consumers, resulting in a flood of new customers for Ford. A Ford survey from the first quarter of 2016 shows that customers like the Mustang Mach-E the most in its market segment, while they like the F-150 Lightning the second most, right behind the F-150 with a traditional internal combustion engine.

Ford is trying to get more people to buy electric cars by removing barriers like high charging and buying costs and making it easier for people to shop for electric vehicles.

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