Ford Motor Company Strikes Lithium Supply Deals for EV Production

What’s Happening

Ford Motor Company, the American automaker, has entered into strategic agreements with three companies: Sociedad Química y Minera de Chile S.A. (SQM), Nemaska Lithium, and EnergySource Minerals (ESM) to secure the supply of high-quality lithium products. These products will be instrumental for the production of electric vehicle (EV) batteries, fueling Ford’s expansion into global electric mobility markets.

Why It Matters

The procurement of battery-grade lithium carbonate and lithium hydroxide is crucial for the production of high-performance EV batteries. The origin of SQM’s lithium should help Ford qualify for the Inflation Reduction Act (IRA) consumer tax credit. Moreover, the sustainable lithium hydroxide produced by Nemaska Lithium and ESM should bolster Ford’s green initiatives and its commitments to sustainable practices, potentially leading to similar tax benefits.

Key Points

SQM’s Executive Vice President Lithium, Carlos Díaz, expressed his appreciation for the alliance, emphasizing SQM’s commitment to sustainability and its ability to deliver high-value lithium products. Lisa Drake, Ford’s vice president, EV Industrialization, Model e, highlighted the importance of such collaborations for Ford to meet its EV production plans and make EVs more accessible to customers.

In addition, Ford has entered into an 11-year agreement with Nemaska Lithium, calling for the delivery of up to 13,000 tons of lithium hydroxide per year. The Québec-based company is planning to be the first to produce lithium hydroxide in the region. Gervais Jacques, Chairman of the Board of Directors of Nemaska Lithium, expressed pride in working with Ford and anticipates this agreement will boost the company’s status in the battery industry in Québec and Canada.

Lastly, Ford has announced a lithium supply contract with ESM. The company will supply Ford with lithium hydroxide produced at its upcoming Project ATLiS™, expected to be operational in 2025. The project aims to maximize lithium output in a sustainable way, setting a new standard for lithium production.

Bottom Line

With these long-term agreements, Ford is not only securing a steady supply of lithium products for its EV production but also promoting sustainable and environmentally friendly practices. This move will enable Ford to boost its global EV expansion plans, potentially making EVs more accessible and affordable to consumers. Furthermore, these collaborations highlight the growing importance of a strong and sustainable lithium supply chain for the automobile industry in the context of the broader push towards electric mobility.

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