Ford Motor Co unveiled an ambitious strategy to profitably ramp up electric vehicle sales but faces a challenge to slash $7 billion in costs and regain credibility on Wall Street.
“You’re not going to believe us until we start delivering it,” Ford Chief Financial Officer John Lawler said at an investor day presentation. “Because we’ve told you this before. That’s the truth. We have and we haven’t delivered. So we have to prove it. We can talk about it, but we have to prove it.”
Ford also unveiled new supply deals for battery-grade lithium as the U.S. automaker aimed to meet its target of producing 2 million electric vehicles by 2026, closing the gap on market leader Tesla Inc (TSLA.O). “We’re so far behind on waste and cost,” Ford CEO Jim Farley said. In February, Ford predicted a difficult 2023, blaming chip shortages and other supply chain issues and production “instabilities” that raised costs.
North American automakers are racing to secure supplies of battery materials to boost EV output as demand surges for environmentally friendly vehicles, and to take advantage of U.S. tax credits.
The deals announced Monday mark an expanded bet by Ford on direct lithium extraction (DLE) technology, an emerging crop of unproven filtration technologies aimed at revolutionizing how the metal is produced for the EV industry.
Under their terms, Albemarle Corp (ALB.N) and Nemaska Lithium will supply lithium hydroxide, a primary ingredient in the cathode of lithium-ion batteries, over five and 11 years respectively. Albemarle will supply more than 100,000 metric tons of lithium hydroxide for about 3 million future Ford EV batteries, the companies said.