Ford Motor Company has signed four new lithium offtake agreements across a mix of established producers and prospective suppliers. 

Ford Motor Company (“Ford”) has signed four long-term offtake agreements for lithium chemicals as the car manufacturer looks to secure supply for its North American electric vehicle (EV) targets. The company has signed agreements with SQM (Sociedad Química y Minera de Chile), Albemarle, Nemaska Lithium, and Compass Minerals.

All four companies source (or aim to source) their lithium supplies domestically or within countries with which the United States has a Free Trade Agreement (FTA), allowing Ford to take advantage of incentives offered by the Inflation Reduction Act (IRA). This legislation states that EV manufacturers can offer subsidies on electric vehicles sold in the US if 40% of their battery’s value is derived from domestic sources, or countries with which the US has an FTA.

SQM will provide Ford with lithium carbonate and lithium hydroxide, sourcing material from its Salar de Atacama brine facilities in Chile. Similarly, Albemarle also source lithium brine feedstock from the Salar de Atacama, though the company then synthesizes lithium chemicals within the US for further sales. These are the only two currently producing companies from the recently announced round of offtake partners. SQM will provide Ford with lithium carbonate and lithium hydroxide, though exact volumes are yet unknown. Albemarle has agreed to provide Ford with 100kt of lithium hydroxide per year over a five-year period, beginning in 2026.

The other two agreed offtakes come from lithium projects that are currently in the development phase. Nemaska Lithium, partly owned by US-based lithium producer Livent Corporation, is a Canada-based lithium mineral project. The project consists of a planned mine and an integrated lithium hydroxide refinery. Upon completion, Nemaska has agreed to provide Ford with 13kt of lithium hydroxide per year. Compass Minerals is a Utah-based lithium brine project, which aims to produce lithium carbonate. The company has agreed to provide 4.4kt of lithium carbonate per year upon production commencing.

While SQM and Albemarle are established lithium producers, with developed resources and supply chains, Nemaska Lithium and Compass Minerals represent less established flowsheets, which come with added risks. Compass Minerals is seeking to use Direct Lithium Extraction (DLE) technology at the Ogden resource to produce lithium carbonate. DLE flowsheets must be tailored to specific brine resources, and the number of successful examples of this being achieved in the sector are few. Similarly, cost blowouts at Nemaska Lithium have caused problems for the project’s development and funding in the past.

However, the advantage of IRA-compliant offtake partners as well as all the supply routes originating in countries with established mining codes and industries seems to be enough to mitigate supply risk concerns. Additionally, with concerns over battery material supplies being ever present, auto manufacturers are increasingly looking to secure supplies from a wider variety of sources as time goes on.