Getting the ugly out of the way is that up to 8,000 jobs in the coming weeks will be eliminated from Ford Motor Company as Jim Farley CEO of Ford plans to slash $3 Billion in costs by 2026 and he says this comes from having too many people in the newly created Ford Blue unit that produces gasoline powered vehicles.
The bulk of these cuts will come from the white-collar workforce and mostly in the U.S. where Ford employs more than 31,000 salaried workers. The cuts will come in phases beginning this summer. Operational phases where duplication in jobs and jobs that will no longer be needed due to the shift to EVs will happen as Ford modernizes their automotive business units as well as the entire company. Ford has stated that their Ford+ transformation will lead a exciting and disruptive new era of electric and connected vehicles, reshaping the way Ford employees work.
Farley is on record as saying both the ICE and BEV portfolios are under-earning due to too many people and workforce reduction is key to boosting profits.
On the flip side of job losses is that Ford has secured Batteries to Build 600,000 EVs a year by the end of 2023 and 2 million a year by the end of 2026. Ford sees EV demand growing at more than 90% annually.
Ford has broken down their EV production by the end of 2023 as follows in the slide above. and with that come two types of battery packs, the LFP and current NCM batteries. Here you will find the LFP as the standard battery packs and in performance and long distance you will find the NCM. Ford is using Contemporary Amperex Technology Company LTD. (CATL) from China as the global supplier of LFP battery cells. LFP or Lithium Iron phosphate will give long life with minimal range loss, much like Tesla has done with their standard battery pack where the NCM or Nickel Cobalt Manganese lithium-ion battery cells will be used in the Long Range and performance battery packs. Ford has stated that the LFP batteries not using rare earth elements will reduce the cost of the battery packs by up to 15%.
Press Release bullet list:
- Ford has added battery chemistries and secured contracts delivering 60 gigawatt hours (GWh) of annual battery capacity to deliver global 600,000 EV run rate by late 2023
- Lithium iron phosphate battery packs coming for Mustang Mach-Es sold in North America next year and F-150 Lightnings in early 2024, creating more capacity for high-demand products
- Ford already has sourced 70% of battery capacity to support 2 million+ annual EV global run rate by 2026; plans to localize 40 GWh per year of lithium iron phosphate capacity in N.A. in 2026; new deal with CATL on strategic cooperation for global battery supply; and direct-sourcing battery raw materials in U.S., Australia, Indonesia – and more
- Company expects compound annual growth rate for EVs to top 90% through 2026; more than double forecasted global industry EV growth
Ford also has announced that their long-standing agreement with LG Energy Solutions and SK On has ramped up much earlier than planned to ensure that globally Ford can deliver on pre-orders for Mach-e and Ford F150 Lighting demand as well as the e-Transit vans that are seeing high pre-orders in Europe and North America.
Ford also announced non-binding MOUs with major mining collaborators sourcing most of the nickel needs for batteries through 2026 and beyond.
- Vale Canada Ltd.: To explore potential opportunities across the EV value chain.
- PT Vale Indonesia and Huayou Cobalt: For exploring a three-way nickel processing project and, separately, an off-take agreement with Huayou that collectively will provide Ford with rights to the equivalent of 84 kilotons per annum (ktpa) of nickel.
- BHP: For nickel supply from BHP's Nickel West operations in Australia. The targeted multi-year agreement could start as early as 2025 and may involve additional commodities over time.
Ford has also announced key lithium contracts that are locked in and additional MOU contracts for Aluminum and copper. To this end, Ford is pleased to announce localize processing of key battery materials in North America with the following:
- EcoPro BM and SK On: Have signed a non-binding Letter of Intent with Ford to establish a cathode production facility in North America.
- ioneer: Has signed a binding off-take agreement with Ford for lithium carbonate from ioneer’s Rhyolite Ridge project in Nevada to support EV production beyond 2025.
- Compass Minerals: Has signed a non-binding MOU for lithium hydroxide and lithium carbonate from its Utah operations on the Great Salt Lake.
- Syrah Resources and SK On: Have signed a non-binding MOU to secure off-take for natural graphite from its processing site in Vidalia, Louisiana.
Ford cautions on future sales, but is happy to state for the first time, a majority of customers have stated they will buy EV or Hybrid vehicles, up 11% from last year and 22% from 2020.
60% of commercial customers who do not have EVs deployed yet in the latest Ford Pro Survey indicated that they are ready to buy EVs in the next 24 months to add to their fleets.
Ford Model e Chief Customer Officer Marin Gjaja has this to say:
“This is our opportunity to win a whole new group of customers, building their loyalty and advocacy as we grow our market share," "We're developing the digital and physical services and experiences those new customers expect when they purchase a product that to them is a new technology purchase. Our aim is to combine the convenience of digital shopping with Ford’s expertise, scale and the physical presence of our dealers to create the best possible experience for tomorrow’s EV owners.”