Race to secure battery metals heats up as GM, Ford ink deals

Undeterred by the slowing global economy, buyers of key components in the powering of electric vehicles are stepping up efforts to lock in supplies, with two of the world’s biggest automakers signing direct deals with producers of so-called battery metals.

General Motors announced three deals Tuesday for supplies of raw materials needed to build a million EVs a year. Less than a week ago, Ford revealed a list of suppliers of inputs ranging from Argentine lithium to Indonesian nickel — enough to build 600,000 EVs a year.

The world’s shift into electric vehicles means demand growth for lithium, nickel, cobalt, and other key ingredients in EV batteries is outpacing supply that’s been hampered by COVID-19-related logistical woes and a general lack of investment, pushing up prices. There are also growing concerns over China’s dominance of refining and manufacturing capacity of the materials. Reliance on the Asian nation is now seen as a vulnerability amid trade and political tensions that are spurring a rethink of global supply lines.

The first of GM’s new arrangements for its next-generation EVs is with LG Chem Ltd. to supply 968,000 metric tons of cathode material through 2030. The second is a multi-year agreement with Livent Corp. to secure lithium. The third is a venture with Posco Chemical Co. to supply cathode materials from 2023 to 2025.

Chief Financial Officer Paul Jacobson told Bloomberg TV in an interview that these supply deals will enable GM to build a million EVs a year by 2025.

The Detroit-based automaker is building four U.S. battery cell plants, with the first to open “in a matter of weeks,” James Cain, executive director of finance and sales communications, said in an emailed message. A second will open in 2023 and a third in 2024, he said.

Ford said it secured enough battery supply to build more than half a million electric vehicles annually by late next year, a quantum leap above the 27,140 battery-powered cars it sold in the U.S. last year. It has signed contracts with suppliers representing 60 gigawatt hours of annual battery capacity. The two carmakers’ suppliers mostly have or will have regional facilities to provide materials, highlighting efforts to rely less on Chinese refining and manufacturing.