American auto major Ford Motors is making strident push towards electrification in recent times, and is investing about $50 billion to diversify its EV portfolio in global markets. The company aims to produce two million EVs annually by 2026.
However, the on-going surge in prices of key battery raw materials and geo-political supply chain constraints are threatening the company's plan towards mass adoption of EVs. Ford is reportedly re-strategizing its investments, and is considering purchase of companies that secure critical raw materials or may even start its own operations, according to news portal Ford Authority.
It is reported that Ford's CEO Jim Farley revealed such plans while speaking at the automaker's 2022 shareholder's meeting. "The real key first and second inning move in building batteries either in a JV or by ourselves is going to be securing raw materials, especially nickel and lithium, and so we're working really hard as a team to do that so that the two million units of vehicles in 2026 has no risk relative to the raw materials", he has said.
"The last thing I'd like to say is we really need to localize the precursor and refinement and mining of the raw materials to where we build the vehicles and the batteries and that means building for the first time ever, a raw material ecosystem here in North America, our largest market. That will be a really big, important strategic thing for the competitiveness of Ford in our country, he added, as reported by Ford Authority.
At the beginning of the Russia-Ukraine war, Ford said that the company wouldn't have to hike the consumer prices of EVs to offset higher battery costs. It was reported that the brand had already worked out longer-term contracts for its sourcing of nickel at pre-conflict pricing. Subsequently, the consequences of the supply chain impacts were discussed at quarterly report and investor meeting in the end of April this year.
Notably, Ford has also partnered with startup Redwood Materials to form a 'closed loop' circular supply chain for EV batteries. The companies have vowed to deliver first anode material in 2023-2024 and cathode material mid-decade from recycling, in pursuit of reducing the brand's import dependence of battery metals.
Ford and Redwood are also working closely with SK Innovation, a Korean battery firm which has a JV with automaker named 'BlueOvalSK' to make battery cells in the United States.
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