Ford (NYSE: F ) revealed Monday that the Detroit automaker has signed three deals for the supply of lithium products, including lithium hydroxide, as the automaker ramps up electric vehicle (EV) production to 2 million units by the end of 2026, an increase from their previously projected 600,000 by the end of this year.
These agreements are a response to the fierce competition among North American automakers to ensure a stable supply of battery materials, which are crucial for enhancing EV output. The objective is to keep pace with Tesla, Inc. (NASDAQ: TSLA ), the leading player in the market, as the demand for environmentally-friendly vehicles continues to surge.
The long-term deal with Canada's Nemaska Lithium is for the supply of up to 13,000 tons of lithium hydroxide every year, while the contract with EnergySource Minerals will help Ford receive lithium hydroxide from the Imperial Valley, California site, expected to be operational in 2025.
Ford also disclosed a five-year agreement with Albemarle Corp. (NYSE: ALB ) to supply more than 100,000 metric tons of battery-grade lithium hydroxide for about 3M future Ford EV batteries.
The company reaffirmed its full-year guidance of $9 billion to $11B of adjusted earnings before interest and taxes and about $6B in adjusted free cash flow. However, the automaker still expects its electric vehicle unit to lose $3B this year.
The company will be hosting its “Delivering Ford+” capital markets day on Monday at the Ford Experience Center (FXC) in Dearborn.
Shares of F are up 0.17% in pre-market trading on Monday.
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