Ford believes that using LFP batteries can reduce costs by 10 to 15 percent.
Ford said it will import lower-cost lithium-iron, or LFP, batteries from CATL to make electric pickups and SUVs more affordable for consumers. This strategy is part of the US car giant’s plan to catch Tesla, the leading brand in the global electric vehicle market. Reuters reports that Ford aims to secure the battery and battery materials for the next decade by signing various contracts with battery manufacturers.
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Lithium-iron or LFP batteries have gained more momentum compared to conventional lithium-ion or lithium-ion batteries that are widely used in electric vehicles. LFP batteries are said to offer higher energy density, better range, better performance and more economically viable.
Ford vice president Lisa Drake reportedly said the automaker plans to source lithium-iron, or LFP, batteries from a new 40 GWh plant in North America starting in 2026. However, Drake did not say whether CATL would build the plant. “I wouldn’t say we have 100% confidence that all of them can be localized… It’s hard work,” he added.
Ford believes that using LFP batteries can reduce costs by 10 to 15 percent, helping to offer electric vehicles at a more affordable price. Tesla currently offers LFP batteries in some lower-priced Model 3 sedans in the United States. Electric truck and van maker Rivian has also said it plans to use LFP batteries.
Ford says it is targeting an eight percent pre-tax profit margin on its EVs by 2026. The company has said its electric vehicle business is not currently profitable. Even an eight percent margin would fall short of the 14.6 percent profit margin Tesla reported in the second quarter.
Ford also aims to increase its annual production rate of electric vehicles to 600,000 vehicles by the end of 2023 and to more than two million by the end of 2026. The company expects EVs to grow at a CAGR of 90% by 2026, more than double the forecast. industry growth rate.
Date of first publication: 25 July 2022, 08:00 IST