Ford CEO doesn’t expect electric vehicle battery costs to drop soon

Ford CEO Jim Farley poses with the Ford F-150 Lightning pickup truck in Dearborn, Michigan, May 19, 2021.

Rebecca Cook | Reuters

WAYNE, Mich. – Ford Motor CEO Jim Farley doesn’t expect the costs of uncooked supplies for the corporate’s electric autos to ease within the close to future, marking the newest sign that automakers will proceed mountain climbing costs for his or her new EVs.

“I don’t think there’s going to be much relief on lithium, cobalt and nickel anytime soon,” Farley informed reporters Wednesday throughout an occasion on the automaker’s Michigan Assembly Plant.

Farley’s feedback come a day after the Detroit automaker introduced it could be elevating the beginning costs for its electric F-150 pickup due to “significant material cost increases.” The will increase vary from $6,000 to $8,500, relying on the mannequin. Ford is not alone: Rival Tesla elevated its U.S. costs in June.

Prices of all lithium, cobalt and nickel have risen sharply over the previous 12 months as demand from battery makers has outpaced miners’ efforts to enhance provide.

Farley mentioned the fast-rising costs of the minerals utilized in its present lithium-ion batteries are why Ford plans to provide lower-cost lithium iron phosphate, or LFP, batteries in autos such because the F-150 Lightning and Mustang Mach-E crossover.

“I don’t think we should be confident in any other outcomes, than an increase in prices,” he mentioned. That’s why we expect LFP expertise is important … We need to make these inexpensive.”

Read extra about electric autos from CNBC Pro

Last month, Ford mentioned it’s going to start providing LFP batteries from Chinese battery large CATL that do not use nickel or cobalt as a lower-cost possibility within the Mustang Mach-E subsequent 12 months. The firm plans to develop the choice to the F-150 Lightning in 2024.

Ford additionally has invested in Colorado-based battery startup Solid Power, one among a number of corporations working to develop solid-state batteries for electric autos. Solid-state batteries have the potential to provide EV homeowners extra vary, shorter recharging instances, and a decrease threat of fires than at the moment’s batteries.

Solid Power mentioned Tuesday that it is on observe to ship prototype batteries to Ford and BMW, additionally an investor, by the top of the 12 months. But autos utilizing the batteries are nonetheless at the least a number of years away.

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