Ford, flurry of deals on batteries and raw materials. But 8 thousand cuts

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Ford is preparing to cut several thousand jobs to reduce costs and support the transition to electric vehicles. The group is expected to announce the suppression of more than 4,000 positions in the coming weeks, according to the Wall Street Journal, while according to Bloomberg, “up to 8,000 positions” could be reached. Meanwhile, the group has announced a series of industrial agreements on the side of battery capacity and raw materials. To make the transition “we are reshaping the work and modernizing the organization. We have set clear cost structure targets to be lean and competitive with the best in the industry, ”a spokesperson said.

Investments of 50 billion

Ford Motor outlined plans a year ago to increase spending on its electrification efforts by more than a third and said it aims to have 50% of its global volumes be fully electric by 2030. Through the aforementioned plan. “Ford +”, designed to transform the Dearborn, Michigan house, in the eyes of investors into a Tesla-modeled tech company, the second-largest US carmaker by voice of its CEO Jim Farley plans to spend more than $ 50 billion on the electrification, including battery development, by 2030, compared to its previous goal of 30 billion. In the spring, Ford in the meantime put on the market the electric version of the F-150, the best-selling pickup in the United States, for about 40 thousand dollars of base, a real goose that lays golden eggs for Ford for the margins it guarantees, and launched the all-electric Mustang Mach-E crossover.

The agreements on batteries

The deals announced today are part of Ford’s plan to have annual electric vehicle production reach 600,000 globally by the end of 2023 and over 2 million by the end of 2026. Ford said it expects a growth rate compound annual rate for electric vehicles that will exceed 90% until 2026, more than doubling the growth rate forecast for the sector. However, profitability will begin to show from the start of production of the next generation models in 2025. As part of its drive to increase capacity, Ford said it is adding lithium iron phosphate (LFP) cells for batteries to its portfolio. , together with nickel cobalt manganese. Ford said it secured all 60 gigawatt hours (GWh) of useful capacity to support the running speed of 600,000 vehicles. An agreement has been signed with the Chinese (world number one) battery manufacturer CATL, which will supply complete LFP battery packs for Mustang Mach-E crossovers for North America starting next year and for F-150 Lightning pickups at early 2024. The US company is also partnering with Korea’s LG Energy Solution and its longtime battery partner SK Innovation.

Secure raw materials

Ford said it has purchased about 70% of the battery cell capacity it needs to reach its annual production rate of more than 2 million vehicles by the end of 2026. President Joe Biden has prioritized establishing the energy independence of electric vehicle batteries and is encouraging American carmakers to source them locally, rather than from China. Ford argues that to meet the growing demand for electric vehicles, it must necessarily import. However, the US company is also purchasing raw materials directly, and has announced agreements to acquire most of the nickel needed until 2026 and beyond through agreements with Vale Canada, PT Vale Indonesia, Huayou Cobalt and BHP. It also blocked lithium contracts through agreements with Rio Tinto. The race to 600,000 electric vehicles by the end of 2023 includes 270,000 Mustang Mach-E crossovers, 150,000 F-150 Lightning pickups, 150,000 Transit vans and 30,000 units of a new SUV for Europe, whose production will increase significantly in the 2024.

The news did not give too much panache to the title. And since the beginning of the year, the decline has been more than 40 percent.