Ford Motor Company (NYSE:F) admitted costs were billions of dollars higher than the likes of Tesla and other electric vehicle manufacturers on Monday, amid an update to investors.
“We're so far behind on waste and cost,” chief executive Jim Farley told investors, estimating that Ford was at a US$7bn disadvantage compared to competitors.
Ford reassured investors of attempts to reduce costs though, announcing new supply deals for battery-grade lithium as part of plans to produce 2mln electric vehicles by 2026.
"You're not going to believe us until we start delivering it," chief financial officer John Lawler added, “we have and we haven't delivered. So we have to prove it.”
New deals with Albemarle Corp and Nemaska Lithium will see Ford secure supplies of lithium hydroxide for five and 11 years from each respectively, including enough for 3mln cars from the former.
Ford delivered just under 100,000 electric vehicles globally last year with aims to boost production capacity to 600,000 by the end of this year, though this is still far off the 1.7mln and 1.3mln models built and sold by Tesla in 2022.
Jefferies analysts noted that Ford’s deal with Albemarle, which will focus on unproven lithium extraction technology, was an indication that EV companies were acknowledging the risks of future supply constraints.
Ford previously blamed chip shortages and supply issues stemming from the pandemic for what could be a difficult 2023 in February.
Though Ford plans to open several new factories in the coming years, the carmaker reiterated guidance that its EV wing would lose US$3bn this year.