American automaker Ford Motor recently announced that it has reached an agreement with a Chinese supplier to acquire electric vehicle batteries as part of its efforts to ramp up global EV production. The Michigan-based company plans on investing billions of dollars across three states to ramp up the production of new electric vehicles over the next few years. Naturally, this will increase Ford’s demand for EV batteries exponentially.
As per its new agreement, Ford will source electric vehicle batteries from the Chinese firm Contemporary Amperex Technology Company Limited (CATL), currently the largest producer of batteries on the globe. This means CATL, which is considered by many to be the second most important company in the global electric vehicle industry after Tesla, will gain an even greater market share of the EV battery segment.
The announcement also cements the position of Chinese companies in the electric vehicle supply chain, especially regarding the rechargeable batteries that power EVs. According to research firm Benchmark Intelligence, companies from China are responsible for nearly 80% of the world’s cobalt refining. Ford will also source EV batteries from two South Korean companies: SK On and LG Energy Solution.
Furthermore, Ford announced that it is in the midst of securing the supply of essential EV battery raw materials such as nickel and lithium from different countries, including Australia, Indonesia and Canada, by dealing with mining companies directly. These raw materials have seen steep price increases in recent times, partly due to surging demand from the automotive industry along with the ongoing Russia-Ukraine war. As a result, several automakers have increased the prices of their EV models.
For example, General Motors raised the price of the GMC Hummer electric pickup truck by $6,250, Tesla increased the cost of the Model Y SUV to $69,000, and even Ford hiked the price of the Mach-E by $4,000 to $67,095. Regardless, Ford is forging ahead with its electrification plans.
Cumulatively, the agreements with the Asian companies will enable Ford to manufacture up to 600,000 electric cars annually by the end of next year.
Unlike automakers such as General Motors, Volkswagen, and Hyundai, Ford was slow to take to electrification. But after barely two years in the game, Ford has managed to give Tesla a run for its money via the Mustang Mach E and the F-150 Lighting pick-up truck. The Michigan-based automaker now plans on producing 270,000 Mach Es per year for the Europe, Chinese and America markets by 2024, 150,000 F-150 Lightnings for the North American market, and 130,000 electric transit cars for Europe and North America.
The race for dominance in the electric vehicle industry is fully underway, and startups such as Mullen Automotive Inc. (NASDAQ: MULN) will need to ramp up as well if they are to keep dominant companies such as Tesla within sight.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
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