Ford Delays Lithium Supply Deal Amid EV Struggle
Carmaker Says It Could Lose as Much as $5.5 Billion on EVs This Year
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Ford Motor Co. will buy less lithium and delay taking shipments from Australian producer Liontown Resources Ltd., the latest sign of strain in the electric vehicle supply chain.
The U.S. carmaker will not take any lithium from the Kathleen Valley project in 2027 and 2028, Liontown said in an exchange filing on Oct. 8.
The volume to be delivered to Ford from the Western Australia site will also be halved to a total of 256,250 tons, it said.
The overhaul of the supply deal comes as U.S. automakers face challenges including a bleaker outlook stemming from President Donald Trump’s push to cut sales incentives and roll back emissions standards.
Lithium is a key ingredient used in EV batteries, and manufacturers around the world had been rushing to lock down future access, including securing direct supplies and funding mining projects. Now, even as prices of the raw material retreat amid a glut, some carmakers are rethinking their EV strategies.
Ford has forecast it could lose as much as $5.5 billion on EVs this year. Its U.S. EV sales plunged 31% in the second quarter, hurt by aging models and a temporary halt in sales of the electric Mustang Mach-e due to a safety recall. Last week, Ford CEO Jim Farley predicted the share of zero-emission vehicles — currently around 10% of the domestic market — could fall by half.
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“The changes to the offtake agreement afford Liontown the opportunity to place further volumes in the market, including giving it the ability to sell additional tonnes into the spot market to encourage transparent pricing or to pursue new strategic partnerships” the Australian producer said in the statement.
Liontown has previously resold some material originally earmarked for Ford to Chinese refiner Chengxin Lithium Group Co. Ltd.
