U.S. auto giant Ford Motor Co. has followed in the footsteps of Tesla and Korea’s LG Energy Solution after striking a deal with Australia’s Liontown Resources for the lithium supply for the next five years.
The move comes as automakers scramble to secure the supply of the valuable commodity as the global pursuit of net-zero pushes up demand for the critical mineral, which has driven prices to new heights.
On June 29, the Western Australia-based Liontown announced that a five-year deal had been finalised with Ford Motor for the supply of 75,000 dry metric tons of spodumene concentrate in the first year, followed by 125,000 tons in the second year and 150,000 per annum in the remaining three years. Spodumene concentrate is a source of lithium important for EV battery development.
Driving Global Decarbonization
Around 90 percent of Kathleen Valley’s slated total production (450,000 metric tons per annum) will be shared between the Ford deal and earlier agreements with LG Energy Solution and Tesla.In February, Tesla signed a five-year deal with Liontown securing 100,000 dry metric tons of spodumene for the first year and 150,000 dry metric tons for each of the remaining four years.
Lisa Drake, vice president of Ford’s EV Industrialization, said the latest deal would help the carmaker deliver two million EVs annually to its customers by 2026.
“This is one of several agreements we’re working on to help us secure raw materials to support our plan to deliver EVs for customers around the world and meet our environmental, social and governance commitments,” she said in the statement.
As the climate change movement takes off in developed countries, demand for lithium has soared as governments and businesses push for greater electrification of car networks, as well as larger battery storage to support electricity grids.
This, in turn, has driven up the price of the mineral from around US$17,000 per metric ton in 2021 to US$78,032 per metric ton in 2022.
