As the carmaker ramps up the production of electric vehicles (EVs) to 2 million units by the end of 2026, Ford Motor Co. (F.N) announced on Monday that it has inked a long-term agreement with Nemaska Lithium for the supply of lithium products, including lithium hydroxide.
Before the bell, shares of the corporation, which will host a “Capital markets” event later in the day, grew by around 1%. The agreement with the Canadian lithium firm comes as American automakers scramble to secure battery material supply in order to increase EV output and catch up with market leader Tesla Inc (TSLA.O) amid increasing demand for environmentally friendly vehicles.
Strengthening the EV Efforts
Ford became PT Vale Indonesia’s and Zhejiang Huayou Cobalt’s new partner in a $4.5 billion nickel processing plant in Indonesia earlier this year. The agreement, which was made public on Monday, would help Ford “strengthen its sourcing to produce two million EVs by the end of 2026 – and beyond,” at a time when skepticism about the automaker’s ability to meet that goal still prevails on Wall Street.
Ford updated its full-year estimate, which now calls for adjusted earnings before interest and taxes of $9 billion to $11 billion and approximately $6 billion in adjusted free cash flow. The manufacturer is still anticipating a $3 billion loss for its electric vehicle division this year. Investissement Québec, the provincial government’s agency for economic development, and Livent each share an equal stake in Nemaska Lithium.
Ford collaborates with Nemaska Lithium to boost its EV Efforts
Ford’s EV Target
Ford Motor Co. earlier this month surprised Wall Street with a good first quarter, but chief executive officer Jim Farley still had to deal with a hostile audience by sticking to a plan for the company’s cash-strapped electric vehicle (EV) segment to produce two million models annually in a few years.
Adam Jonas, a Morgan Stanley analyst, stated, “I appreciate that Jim,” during Ford’s results call on May 2. However, that objective raises concerns because it is a “crazy high number.” Farley is indifferent. To grow profit and annual production to two million units by the end of 2026—a 16-fold increase from this year—he sees a path that involves cutting production costs on Ford’s current EVs and introducing a more effective second generation.