For many, the rise of electric vehicles is an exciting development that foreshadows a radical shift in the way that people move all across the world. However, the ever present question of manufacturing batteries challenges this futuristic vision. In response to this, Ford has announced several innovations and technical improvements that look like they will ease these concerns. First, Ford has adjusted its battery chemistry in order to better cope with global demand for battery packs. Ford is adding lithium iron phosphate (LFP) cell chemistry to its portfolio, alongside its existing nickel cobalt manganese (NCM) chemistry, which will allow for drivers to use their electric vehicles with a minimal loss of range. It also reduces the reliance on scarce critical minerals such as nickel and, at current costs, brings a 10 to 15% bill of material savings for Ford versus NCM batteries.
Currently, Ford has secured contracts with battery manufacturers like Contemporary Amperex Technology Co. Ltd. (CATL) that will ensure that a run rate of 600,000 EV battery packs per year will be achieved by late 2023. Even more encouragingly, Ford has already sourced 70% of the battery capacity it will need to support its projected 2 million+ annual EV global run rate by 2026. Deals with battery manufacturers in 2026 will also allow Ford to source raw materials from new locations, supporting future growth.
The American manufacturer projects the compound annual growth rate for electric vehicles to be above 90% through 2026. This figure more than doubles industry estimates for EV growth. This expansion will be a global endeavor as well. Ford and CATL have also signed an agreement that established their cooperation in supplying batteries in Ford’s markets across China, Europe and North America. These steps are highly encouraging to all who are interested in the growth of electric vehicles, the environment, or consumers who seek to switch to a more environmentally friendly lifestyle.
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