Ford Motor Co. announced Thursday it has secured enough battery supplies to build electric vehicles at a rate of 600,000 per year by the end of 2023 — and it is relying on a major Chinese company to meet that target.
The Michigan-based car manufacturer has entered into an agreement with Contemporary Amperex Technology, a Chinese battery maker, to produce 2 million EVs per year by 2026.
“Ford’s new electric vehicle lineup has generated huge enthusiasm and demand, and now we are putting the industrial system in place to scale quickly,” Ford CEO Jim Farley said in a statement. "Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need to deliver breakthrough EVs for millions of customers.”
Ford has set ambitious targets for electric vehicle production in upcoming years, claiming there is "strong demand" for these products.
In March, the company split into two divisions: Ford Blue, which will build traditional combustion engine automobiles, and Ford Model e, which will solely produce electric vehicles. The company has pledged a $50 billion investment into its electric vehicle business to compete with other EV makers like Tesla. It reportedly is planning to cut as many as 8,000 jobs from Ford Blue as well to boost profits and support the EV business, according to Bloomberg News.
By 2023, Ford Model e intends to build 270,000 Mustang Mach-Es, 150,000 F-150 Lightnings, 150,000 Transit EVs, and 30,000 SUV units.
Ford said that it has secured 100% of the annual battery cell capacity needed to meet these targets by working with "leading battery companies around the globe."
China's Contemporary Amperex Technology, better known as CATL, is the world's largest manufacturer of lithium-ion batteries, controlling more than 35% of market share for electric vehicles, according to Bloomberg. Ford said CATL will provide full LFP battery packs for Mustang Mach-E models in North America beginning next year, as well as F-150 Lightnings in early 2024.
Ford is also using its current partnerships with Korean companies LG Energy Solution and SK ON to meet its late-2023 EV production targets.
Additionally, Ford and CATL announced a separate, non-binding memorandum of understanding to expand their cooperation and supply batteries for Ford's EV markets in China, Europe, and North America.
Ford also announced plans to localize 40 gigawatt hours of annual battery capacity in North America in 2026, and agreements to direct-source battery raw materials. These plans are in addition to previously announced battery plants located in Kentucky and Tennessee.
In September, Senate Majority Leader Mitch McConnell (R-Ky.) praised Ford for expanding electric vehicle manufacturing in the United States.
“I applaud Ford for their decision to bring their new battery plants to Hardin County, which will provide a much-needed economic boost to the region and create thousands of well-paying Kentucky jobs,” McConnell said at the time. “With Ford’s commitment, we have further solidified our role as a world-class automotive state on the cutting edge of research and development. I look forward to continuing to pursue pro-business policies in Kentucky and nationwide that will allow great American companies like Ford to continue to prosper and grow our economy.”