Ford Counting On U.S.-Mined Lithium To Power Its EV Growth Plans

Management at Ford Motor Company continues to move aggressively to advance the company’s goals of converting its fleet to electric vehicles in the years to come. The Detroit Free Press reported last week that the company plans to lay off 8,000 of its 31,000 salaried workers as part of a plan to implement $3 billion in budget cuts to try to make its’ struggling EV business unit more financially viable.

The company has announced plans to produce 600,000 EVs by late 2023 and as many as 2 million globally by 2025. But the Ford’s EV sales for the first half of 2022 totaled to just around 23,000 units. While that is a significant rise from the same period during 2021, it is a long way from achieving such aggressive goals.

Still, Ford CEO Jim Farley remains bullish on Ford’s EV future. “Ford’s new electric vehicle lineup has generated huge enthusiasm and demand, and now we are putting the industrial system in place to scale quickly,” Farley said in a statement on Thursday. “Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need to deliver breakthrough EVs for millions of customers.”

Achieving those goals will require secure supplies of lithium, and lots of it. Lithium, of course, is a key ingredient in the production of the lithium-ion batteries that power EV fleets around the world. To that end, Ford also announced last week a binding offtake agreement with U.S. lithium mining company ioneer, which I wrote about last May.

The agreement calls for ioneer to supply Ford with lithium carbonate from its proposed Rhyolite Ridge mine in Nevada starting in 2025, which CEO James Calaway told me recently is the targeted startup date for the mining operation, which has been in the works for six years now. The July 21 press release provided by ioneer conditions the deal on the mining company reaching a final investment decision (FID) no later than 2024.

“It’s clearly a win/win for both companies,” Calaway told me. “We both share the objective of building a comprehensive, end-to-end domestic supply chain from mine to car. So it’s a great thing to be able to get this done.”

Despite a series of delays by the federal government in issuing final permits for the project, Calaway is confident those FID and startup dates will be met. If that happens, Ford will be able to source lithium mined and processed in the United States and thus less reliant on global supply chains for lithium carbonate that are largely dominated by China.

But a years-long controversy over a rare plant species called Tiems Buckwheat has been at the heart of efforts by radical conflict groups like the Center for Biological Diversity to obstruct the final permitting of the mining operation. It’s an ongoing source of great frustration for Calaway, who is proud of his company’s ongoing efforts to protect the plant.

“This has been a long process of collaboratively working with the BLM and U.S. Fish and Wildlife,” Calaway said. “The purpose of the work that’s been done over the last several years is to build up a deep scientific understanding of that plant. The second goal has been to come up with a game plan where everyone is confident that we can build a successful operation for production of 20,000+ tons of lithium while ensuring this 10 acres of Buckwheat is not touched” by those operations. “We’ve done more than anyone else to build up the scientific basis to understand it. In the end, we came to the conclusion that, from an absolute certainty of protection approach that we made a series of adjustments to our plans in order to establish a buffer around all the existing plants.”

Calaway said that CBD takes the opposite approach, leaning into rank obstructionism instead of science. “There’s a few radical groups, like the Center for Biological Diversity (CBD) that are just opposed to any development. They don’t do any science; they don’t do any work. They don’t contribute to the understanding – they are simply out to stop development, and I just think that America has had it with this approach.”

It’s an approach CBD has proudly deployed since its founding. In an interview more than a decade ago, founding executive director Kieran Suckling openly boasted about his group’s preference for using the Endangered Species Act as a platform for deploying obstructive tactics and litigation over the conduct of actual science. He also discussed his preference for hiring “philosophers, linguists and poets” instead of botanists and other scientists to do the work of the organization.

Calaway is unimpressed and remains focused on his mission of seeing his mining operation go live on the timeline designated in the agreement with Ford, while at the same time fully protecting the Buckwheat. “We need this production,” he said. “It has to be weighed against environmental concerns, but the Buckwheat has a much better chance of survival if we’re out there working to ensure its protection and viability.”

That obviously won’t happen without the mining operation ultimately being approved to move ahead by the Biden administration. If Mr. Biden is to achieve his own targets for moving to EVs in the U.S., mines like Rhyolite Ridge will need to become a reality in spite of the tactics of conflict groups like CBD.