The Big Winners From Ford’s EV Event: Lithium Miners. Stocks Are Higher.

For starters, Ford announced a deal with miner
SQM
(SQM) for the supply of battery grade lithium carbonate and lithium hydroxide. Carbonate and hydroxide are the lithium products used in battery manufacturing. The price most often quoted for lithium products is lithium carbonate, which is about $30,000 a metric ton these days.

“Working with strong global collaborators such as SQM will help us make real progress on making EVs more accessible for our customers down the road,” said Lisa Drake, Ford’s vice president for EV Industrialization in the Model e division. “SQM has established well-run operations, a commitment to sustainability, and a proven track record for scaling capacity.”

SQM is one of the largest lithium producers in the world. So is
Albemarle
(ALB). It also announced a deal with Ford on Monday to supply the auto maker with more than 100,000 metric tons of “battery-grade lithium hydroxide for approximately 3 million future Ford EV batteries.” The five-year supply agreement starts in 2026 and continues through 2030. 

“With the growing demand for EVs in the United States, our customers are seeking to regionalize their supply chain for greater security, sustainability and lower costs,” said Eric Norris, president of
Albemarle
Energy Storage, in a statement. “This agreement exemplifies the industry collaborations and investments required.”

These types of deals help both Ford and the lithium miners. Ford wants secure supply from established players. The miners want to know demand for products will materialize as they expand production. Global lithium projection is expected to rise five- to seven-fold between now and 2030 as the number of EVs on global roads rises from roughly 30 million cars to about 350 million.

“Supply is among the most strategic capabilities of the company,” said CEO Jim Farley at the event. “Actually when you start to insource and you design yourself that you’ve never done before….or [competitors] are going through the same transition…it turns out supply chain is super, super strategic.”

Ford is part of that ramp-up. The 120-year-old auto maker plans to be producing EVs at a run rate of roughly 600,000 by the end of this year and at a run rate of 2 million a year by the end of 2026. It’s a steep climb. Ford sold less than 100,000 EVs globally in 2022. To hit its goals, Ford is spending billions on vehicle development, new assembly capacity and battery plants.

Ford also announced agreements with Nemaska Lithium and
Compass Minerals
(CMP) on Monday. Nemaska will supply lithium hydroxide produced from assets in Quebec. Compass will supply lithium carbonate from assets in Utah.

Nemaska is a joint venture backed by
Livent
(LTHM) and the investment arm of the Quebec government.

The agreements have stocks moving. Compass,
Albemarle
and SQM shares were up 0.6%, 1.3% and 0.2%, respectively.
Livent
are down 1.9%. The
S&P 500
is up 0.2%. The
Dow Jones Industrial Average
is down 0.2%.

Ford stock is down 0.8%.

Write to Al Root at allen.root@dowjones.com