An all-new Ford F-150 Lightning electric pickup is parked in front of the Ford's headquarters in Dearborn. Ford on May 22 unveiled new supply deals for battery-grade lithium to meet its target of producing two million electric vehicles by 2026.

DEARBORN, Michigan (May 22): Ford Motor Co on Monday (May 22) unveiled new supply deals for battery-grade lithium, as the US automaker aimed to meet its target of producing two million electric vehicles (EV) by 2026 and close the gap on market leader Tesla Inc.

Ford is holding an investor event on Monday explaining how it plans to make money and ramp up production of its next-generation electric vehicles as it works to address a current significant cost disadvantage against competitors.

North American automakers are racing to secure supplies of battery materials to boost EV output as demand surges for environment-friendly vehicles and to take advantage of tax credits offered by the US.

Albemarle Corp and Nemaska Lithium will supply lithium hydroxide, a primary ingredient in the cathode of lithium-ion batteries, over a period of five and 11 years, respectively.

Albemarle will supply more than 100,000 tonnes of lithium hydroxide for approximately three million future Ford EV batteries, the companies said on Monday.

Albemarle shares rose 1% in premarket trading to US$206.01.

Ford vice president Lisa Drake said the deal "helps us fortify and de-risk our plans for sourcing the key minerals we need to make EVs more accessible for our customers longer-term".

Lithium, a key component in most modern EV batteries, has a higher energy density, making it possible to keep batteries compact and have higher storage capacities, crucial to enable covering long distances between charging.

Privately held EnergySource Minerals will supply lithium hydroxide from the Imperial Valley, California site, which is expected to be operational in 2025, it said, while Compass Minerals will provide lithium carbonate.

Ford had earlier this year joined PT Vale Indonesia and China's Zhejiang Huayou Cobalt as their new partner in a US$4.5 billion (RM20.46 billion) nickel processing plant in Indonesia.

The deals announced on Monday also come as doubts linger on Wall Street about legacy automakers' ability to hit the lofty targets set for EV production.

Ford has said it would have a global capacity to build 600,000 EVs by the end of 2023. Meanwhile, rival General Motors Co's EV production at mid-decade could be capped as well, according to a forecast and analysis prepared for Reuters.

The US automaker on Monday reaffirmed its full-year forecast of US$9 billion to US$11 billion of adjusted earnings before interest and taxes and about US$6 billion in adjusted free cash flow.

Ford continues to expect its electric vehicle unit to lose US$3 billion this year.

Nemaska Lithium is equally owned by Investissement Québec, the economic development agency of the Québec government, and Livent. Ford will be its first customer.

Chile's SQM, the world's second-largest lithium producer after Albemarle, signed its own long-term supply agreement with Ford on Monday, though neither company specified the number of years.