Ford Authority

Ford EV Raw Material Strategy Does Not Follow Tesla Playbook

In recent months, Ford has worked overtime to secure the raw materials it needs to reach its goals of producing 600,000 EVs annually by 2023 and two million by 2026 by signing deals with a number of suppliers across the globe. The same is true of the automaker’s joint venture partner, SK On, which itself has recently signed deals with companies like Lake Resources and Global Lithium Resources. Additionally, Ford plans to switch the Ford F-150 Lightning EV pickup and Ford Mustang Mach-E crossover to lithium-iron phosphate (LFP) batteries from the current lithium-ion units for the foreseeable future, as they don’t use nickel or cobalt in their construction – moves that are critical as the price of lithium surges. This Ford EV raw material strategy is quite a bit different than Tesla’s, which is a good thing in this case, according to a new report from Bloomberg.

Before other players like Ford and GM entered the EV realm, Tesla essentially had full control over the raw materials market, dictating its own terms in the process. Things have changed dramatically in recent times, however, and those same materials are in high demand and short supply, which is precisely why Ford is forging partnerships with its suppliers.

On the flip side, Tesla has historically avoided such moves, at least in terms of partnering with suppliers to develop new mining operations. Additionally, the automaker has thus far shunned opportunities to acquire mines or lithium companies itself. This strategy worked fine for some time, now now, it’s becoming a bit of a problem, it seems.

Tesla’s competitors are happy to “stuff money into a bazooka and just blast it at the supply chain,” said Chris Berry, president of House Mountain Partners, a battery-metals consultant. “Tesla can’t throw their weight around in terms of negotiations.” Meanwhile, lithium demand is expected to increase more than fivefold by the end of the current decade, and since it takes around $1 billion and six years to construct a new mine, lithium shortages are expected to continue until at least 2026.

We’ll have more on Ford’s EV strategy soon, so be sure and subscribe to Ford Authority for around-the-clock Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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  1. RWFA

    I don’t get the bazooka comment.

    Shouldn’t Tesla have a first mover advantage over traditional because, at least at the moment, they are the big player? Or is it more forward looking fact that at max electrification, there will be more units from traditional, that the ore folks are responding to?


    I scanned article and commented before running off to an appointment.

    In the meantime the bazooka comment is clear.

    The traditional OEMs in an effort to rapidly industrialize and transition to EV powertrains are playing catch up.

    They are paying above market price from when Tesla had little competition.

    The scramble and current ore supply bottleneck has created a sellers market for mining concerns.

    Some observations follow:
    – depending on the strength and duration of Tesla’s long term ore contracts it will have to reckon with price increases.
    – the ore commodity prices will remain high for awhile until enough mines come on line and competition brings prices back down.
    – companies who are entering late are going to have very high ore costs because they will be at the mercy of miners who are already booked and quite busy bringing new mines on line.
    – small players like jlr may not survive the move to EV unless they can attach to some other OEM who has scale based negotiation leverage. (AstonMartin will have to lean heavily on Mercedes, Ferrari on Stellantis.)

  2. Bill

    If solid state hydrogen arrives-Toyota has a working prototype- a giant ballon could rupture. No mining reqired for solid state hydrogen.

    1. RWFA

      “Solid state hydrogen” is not a thing.

      “Solid state” refers to a newer trend in the chemistry/construction of batteries (i.e. with “no” liquid electrolyte component to them.)

      Hydrogen refers, in Toyota’s preferred approach, to onboard electrical generation via an onboard fuel cell fed from hydrogen stored in onboard pressurized fuel tanks.

      Comment: Except for large vehicles with plenty of space to store all this onboard gadgetry, which requires fueling from a filling station style pump with super chilled liquid H2, transported old-style to filling stations by tankers (instead of delivered over electrical lines) this technology IMHO will have limited applications and be all but non existent in light vehicles (most likely to be seen in busses and medium/heavy duty trucks.).

      To my mind, the vast majority of cars (higher share) and light commercial vehicle (lower share) buyers will prefer BEV over H2/FC because of the relative ease of use. This preference gap will only increase as battery chemistry and charging speeds improve. (Today we are somewhere like the 30 pin connector days of the iPhone, getting close to the lightning connector days and the Qi wireless charging days are probably less than 10 years off.)

      Finally, my sense is that H2 doesn’t have the same remaining development potential as battery chemistry, so that over time, batteries will become even more competitive against H2FC tech.

      1. GeeBird

        I hope you are right about the speed of improved battery technology. One should also consider the spillover effect of the technology to solar electric systems. Given the limitations of the current infrastructure, and the staggering cost to upgrade electric transmission capacities, the most viable long-term solution is widespread adoption of residential solar electric with on-site battery storage. Additionally, such a strategy will make it almost impossible for a fully distributed electrical supply infrastructure to be taken out by disaster or hostile actions. Long-term, it is both economically and strategically desirable. And it will require the advances in battery technology you describe.

        1. RWFA

          Agree that long term, distributed micro generation is the way to go but also think stringing additional lines isn’t as monumentally expensive as one might think.

          I just wish the US would finally get to burying non hi voltage lines to get beyond all the own goal weather related failures (ice, snow, trees, hurricanes, etc.); these savings would defray much of the costs of the upgrade.

  3. Ed

    Ford needs to vertically integrate its raw material needs just like Henry Ford himself did. Unless you control the supply chain yourself, you are at the mercy of others.


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