Ford - along with most of its peers - invested heavily in electric vehicles, batteries, and raw materials just a few years ago, forging deals with a number of suppliers amid what was expected to be tremendous demand for EVs. That hasn't yet materialized, however, prompting The Blue Oval to shift gears in a big way. As one might imagine, that means Ford doesn't quite need the same amount of lithium as previously expected, and now, it's altering a deal for that material as a result.
According to Bloomberg, Ford now intends to purchase less lithium from Australian supplier Liontown Resources Ltd. than previously expected. The Blue Oval won't be taking any of that material from Liontown's Kathleen Valley site in Western Australia in 2027 and 2028, and according to the supplier, the total volume of lithium delivered to FoMoCo will be halved to 256,250 tons.
“The changes to the offtake agreement afford Liontown the opportunity to place further volumes in the market, including giving it the ability to sell additional tons into the spot market to encourage transparent pricing or to pursue new strategic partnerships” Liontown said a statement announcing the change. Ford signed the agreement with that company back in 2022, which was originally set to supply the automaker with 150,000 dry metric tons of spodumene concentrate annually - a source of lithium - starting in 2024 and running for five years after that.
However, as Ford Authority reported late last month, Liontown revealed that it was engaged in talks with Ford as it was aiming to revise its offtake and loan agreements with the company, which could impact purchase commitments for future deliveries, contract quantities, and the re-profiling of debt agreements. In recent months, The Blue Oval has pushed back the planned production start dates for the next-generation Ford F-150 Lightning three times, as well as the E-Transit, with both now slated to arrive in 2028.
Comment
Some other chemistry might surpass lithium by the time Ford decides to sell EVs.