Ford Hits Brakes on EV Push, Delays Major Lithium Supply Deal
Automaker pushes back a key battery metal agreement with Liontown Resources, signaling concerns over a slowing electric vehicle market.
Ford Motor Company is tapping the brakes on its ambitious electric vehicle strategy, delaying a significant lithium supply agreement with Australian miner Liontown Resources. The move, which pushes the start of the deal back by two years to at least 2029, is a stark signal that the automaker is recalibrating its production forecasts amid a cooling market for EVs.
The decision comes as a surprise to some, following a quarter where Ford's EV division with a 30.2% increase in sales. However, that sales surge was largely attributed to buyers rushing to take advantage of a $7,500 federal tax credit that expired at the end of September. Even Ford's own CEO, Jim Farley, has for the sector post-subsidies.
Under the revised terms, the total volume of spodumene concentrate—a key lithium source—that Liontown will supply has been halved. The delay and volume reduction point to a significant adjustment in Ford's short-to-medium-term EV production plans, raising concerns about its ability to scale its EV operations as quickly as once projected. This strategic pivot reflects a broader industry trend where automakers are growing more cautious after a period of rapid investment. While , forcing manufacturers to revise aggressive targets.
For its part, Liontown Resources stated the amended agreement provides improved liquidity and 'strategic flexibility,' allowing it to potentially sell more volume on the spot market. Despite the significant changes to the Ford partnership, Liontown's shares saw a modest increase following the news. Nonetheless, the delay from a major automaker like Ford casts a shadow on the near-term demand for battery metals and the overall pace of the EV transition.