| Ford announced a series of agreements to source materials for electric vehicles. The automaker would purchase 100,000 metric tons of lithium hydroxide from Albermarle, which would be used to produce 3 million EV batteries over the next five years. Ford VP Lisa Drake said the deal would pose significantly less risk than relying on "junior producers." Ford also signed an 11-year agreement to become the first client for Nemaska Lithium, a joint venture between the Quebec government and chemical manufacturing company Livent. The car company would also be supplied by EnergySource Minerals for Ford's site in Imperial Valley, California, starting in 2025. The automaker sold 15,617 F-150 Lightning pickups, 6,500 electric vans, and 39,458 Mach-E vehicles in 2022. By 2026, Ford expects to produce 2 million electric vehicles. Market analysts have had questions about Ford's ability to produce enough EVs to meet its goals. "I just get a little nervous with the 2 million unit capacity target that you have hanging out there for the second half of 2026, which, just in my opinion, is a crazy high number," said Morgan Stanley analyst Adam Jones. Similarly, a Morningstar analyst said, "It's great you're saying 8%, but until you do it, I just can't believe you," in relation to the operating margin goal for Ford's EV division. The deals are being announced as electric vehicle manufacturers will be required to source key materials locally or from a country with a free-trade agreement with the United States for the model to qualify for tax credits under the Inflation Reduction Act. 
Ford also announced an agreement with SQM, the world's second-largest lithium producer, which is based in Chile — which has had a free-trade agreement with the U.S. since 2004. For 2023, 40% of sourced materials must be sourced locally or via an FTA to qualify for the credits. This will increase by 10% per year to 2027. Currently, the list extends to 21 countries, including Peru, Japan, and South Korea — as long as the processed critical material does not originate outside these jurisdictions (in 2022, Korean battery companies bought $3.23B of lithium hydroxide from China). 
Ford's announcement adds to the trend of manufacturers shifting their materials strategy, such as General Motors' $650M investment in Lithium Americas, securing access to the Thacker Pass mine in Nevada. Tesla is reportedly seeking a minerals extraction project in Canada and ordered $2.9B in cathode materials from South Korea-based L&F Co. in February. Earlier this month, Tesla broke ground on a $375M lithium refining plant in Corpus Christi, Texas, marking the first of its kind for a U.S.-based auto manufacturer. |
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