Electronics and Semiconductors

Ford secures multiple lithium raw materials deals

24 May 2023
Ford’s BlueOval mega campus that is being built in West Tennessee will build Ford’s next generation electric truck, code named Project T3. The site will be one of many new EV manufacturing centers and lithium battery plants Ford is developing as it rapidly transitions to electrification models. Source: Ford

Ford Motor Company this week entered into a series of new agreements with raw material manufacturers to secure its supply of automotive grade lithium for batteries inside electric vehicles (EVs).

The move continues a trend in automotive OEMs looking to secure deals with raw materials vendors as prices increase for these rare Earth elements and auto makers continue to their largest transition in history to electrification.

Ford made deals with five lithium companies including:

  • Albemarle Corp.
  • Compass Minerals
  • Nemaska Lithium
  • Energysource Minerals
  • Sociedad Quimica Y Minera De Chile S.A. (SQM)

Lithium is the main element in batteries used for EVs, however, the prices are increasing rapidly as demand for EVs continues to grow and government regulations mandate changes to these electrified models to curb climate change.

In North America specifically, Ford and chief rival General Motors are ramping up their move to EVs to compete with Telsa Motors’ grip on the market. But also, to meet some states’ pre-emptive mandates such as California’s move to ban gasoline- and diesel-powered engines over the next 15 years.

The agreements

According to a report from Reuters, the deal with North Carolina-based Albemarle will supply Ford with more than 100,000 metric tons of battery-grade lithium hydroxide. This will power about 3 million future Ford EV batteries under the five-year supply agreement that will start in 2026.

The agreement with Compass Minerals is also a five-year supply agreement that will allow Ford to obtain battery-grade lithium carbonate from Compass’ lithium brine development project in Utah. About 40% of Compass’ planned phase-one raw materials will go to Ford when production begins.

Nemaska Lithium will supply lithium to Ford over an 11-year period with up to 13,000 tons of lithium hydroxide per year included in the deal. Ford will be Nemaska’s first customer, the Reuters report said.

The deal with EnergySource will supply lithium hydroxide produced at its California site, which is expected to be operational in 2025.

Finally, the agreement with Chilean miner SQM is a long-term lithium supply agreement with details being limited.

Not just Ford

While Ford is securing its supply of lithium from multiple sources to fuel its transition to EVs, other companies are doing the same.

Just this year, GM invested $50 million in Energy Exploration Technologies Inc. (EnergyX), a maker of lithium extraction and refinery technology, and made what it claims is the largest investment in battery raw materials by an automotive OEM in Lithium Americas Corp. to the tune of $650 million.

Automotive OEM Mercedes-Benz also took a further step toward its transition to electrification with a new partnership with Rock Tech Lithium, a German-Canadian raw materials startup, in March. That deal will give Mercedes-Benz procurement of raw materials locally in Germany and Europe as it deepens its cooperation in the automotive supply chain.

It is highly likely this is just the tip of the iceberg and this year will see many more agreements between lithium raw materials suppliers and automotive OEMS.

To contact the author of this article, email PBrown@globalspec.com

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