Ford F-150 Lightning.

Ford Signs Battery Materials Deal, Hints At Fixed Pricing Strategy

May 24, 20232 years ago Steve Hanley 0 Comments

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There’s a torrent of news about Ford Motor Company this week, so let’s get you caught up on recent developments. Ford this week announced a long-term contract with EnergySource Minerals to purchase the lithium it needs to manufacture batteries for electric vehicles. In addition, during the company’s Capital Markets Day — the first in-person conference for investors the company has held since 2016 — the company suggested it is considering fixed, non-negotiable pricing, at least for some models.

Ford & EnergySource Minerals

In a press release on May 22, EnergySource Materials announced it has signed a long-term contract with Ford to supply it with lithium hydroxide produced at its Project ATLiS facility located in California. That facility is expected to become operational by 2025.

Key to Project ATLiS is ESM’s patented ILiAD platform, which will efficiently process lithium from brine resources, particularly the geothermal brine in the Salton Sea Geothermal Resource Area. ATLiS will connect to an existing geothermal power facility and remove the lithium from the brine after it has been used to generate geothermal power. The ILiAD technology will dramatically reduce the water footprint compared to alternative approaches, will not consume reagents, will have a much longer operating life, and will achieve higher lithium recovery rates than are currently possible.

Using only a fraction of the carbon, water, and land footprint of any other operation in the world, Project ATLiS will set a new standard in sustainable lithium production, the company said. The project will maximize lithium output in a closed-loop environment and aims to deliver significant reduction in time, cost, and environmental impact compared with alternative approaches.

“We are delighted to announce this contract with Ford Motor Company,” said Eric Spomer, CEO of EnergySource Minerals. “The domestic supply chain for EVs in the United States is taking shape, literally from the ground up. Ford is embracing a domestic, sustainable standard for EV manufacturing and we are proud to play a part in building America’s clean energy supply chain. With our flexible ILiAD platform we look forward to supplying lithium to manufacturers like Ford. Moreover, by deploying our ILiAD technology to brine resources across the world, we will enable an additional supply of sustainably produced lithium more broadly,” he added.

Project ATLiS in California’s Salton Sea is expected to produce approximately 20,000 metric tons of lithium annually — quadruple the current U.S. supply of domestic lithium and enough to manufacture about 500,000 EVs per year.

Lisa Drake, vice president of EV industrialization for the Model e division of Ford, added, “We are working with promising companies such as ESM to help support our ability to scale EV production and make EVs more accessible for customers over time. The work we are doing with ESM is key to growing our access to minerals such as lithium, which is essential to Ford’s EV growth.”

Geothermal power plants extract naturally heated water from deep underground and use it to heat buildings or generate electricity. Afterwards, it is pumped back into the ground to be reheated. EnergySource Materials is not the first company to think about extracting lithium from geothermal plants before it is pumped back underground, but it’s one of the first to create technology to make the idea commercially viable.

In a recent interview with Bloomberg, Ford CEO Jim Farley said he wants to see the company go back to being more vertically integrated, following in the footsteps of Henry Ford. This agreement with ESM is a step in that direction.

Fixed Pricing For Ford?

As part of the sled dog team here at CleanTechnica, I often get emails from people asking me if I would like to interview this muckety muck or that honcho. Without exception, I ask for whatever information they want to share with me to be submitted in writing. I have learned from experience that when I attempt to transcribe oral conversations, disagreements occur between the speaker and the spoken to.

Something similar happened this week as a result of the Ford Capital Markets Day presentation. Kelley Blue Book says the Associated Press is reporting that Jim Farley told the audience, “Ford will go to non-negotiated vehicle prices.” But the Detroit Free Press heard it differently. It claims Farley said, “Non-negotiated prices will be part of improving the customer experience for electric vehicle shoppers.”

Farley hinted about fixed prices for EVs last year when Ford told its dealers to decide whether they want to be at the forefront of the EV revolution or prefer to take a wait-and-see attitude. The consensus here at Casa CleanTechnica is that Farley meant fixed prices for EVs, not conventional cars, but how that will play out in Ford showrooms is unclear. Perhaps they will be divided into two parts, one with boxing gloves hanging above the entrance and the other with playful kittens overhead.

The Associated Press reports Farley promised to “reduce investment in hyper-competitive market segments such as 2-row smaller SUVs.” He indicated Ford would prefer to concentrate on market segments where competitors are not bashing each others’ brains in trying to sell a zillion cars with razor-thin margins.

Instead, expect Ford to concentrate on pickup trucks and commercial vehicles along with its iconic Mustang and its battery electric variant, the Mustang Mach-E. Farley did indicate a three-row, seven-passenger electric SUV may be in the offing, which would compete with the Hyundai Ioniq 7 and Kia EV 9. And the model lineup for Europe will follow its own path, as the company has recently announced a new midsize Ford Explorer for European customers that is considerably smaller that the Explorer North American customers are used to. It is instructive to note that Ford has not produced a sedan for North America since 2019.

Farley On Batteries

Finally, in today’s Ford-focused news, The Verge reports that Jim Farley was heard to say during the Capital Markets presentation, “I have no idea what’s going on in this industry right now.” He apparently was referring to electric vehicles coming from competitors with 450 to 500 miles of range. He may have been referring to the new electric Cadillac Escalade that General Motors was hinting at earlier this week.

GM is also crowing about its Silverado EV pickup truck having 450 miles of range, but the only way to make an electric pickemup with the aerodynamic efficiency of an aircraft hangar go that far is to stuff it full of battery cells. The Hummer EV has a 212 kWh battery pack, while the Silverado EV makes do with “only” a 200 kWh battery. The upcoming Dodge REV will offer a 229 kWh battery and a claimed range of 500 miles.

Higher ranges will necessitate bigger batteries, Farley said. “These batteries are huge. If you have those kinds of batteries, you will not make money, so we’ve got to start talking about the size of batteries for the range, the efficiency.”

The Verge editorializes, “Farley is right. US automakers are relying on supersized batteries to power their equally supersized EVs — namely, all the electric trucks that will soon flood the US market. Car companies (perhaps rightly) assumed that the best way to sell America’s truck-loving population on plug-in power is to electrify a bunch of pickups. And big trucks need big batteries to justify big range to address anxiety any truck buyers may have about switching sides to electric.”

Amen to that. Something is seriously out of whack here. Those pickup trucks will require enough battery cells to power 3 ordinary electric cars in North America, 4 or more in Europe, and 10 in China. America may be exceptional, but that’s not the same as being smart.