Reading The LFP Battery Tea Leaves In Ford’s New Strategy – CleanTechnica

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The Ford Motor Company set the Intertubes humming yesterday when the company announced a major shift in its vehicle electrification plan. In terms of the global automotive market, the news was less than surprising, but buried all the way down at the bottom was an interesting detail about the company’s new LFP EV battery.

The High Cost Of An EV Battery

The EV battery field is heading for yet another makeover as automakers like Ford scout for ways to cut costs. The focus on cost-cutting is right up there at the beginning of the yesterday’s announcement, where the company draws attention to the “advantaged cost structures” of competition in China, adding that “today’s electric vehicle consumers are more cost-conscious than early adopters.”

“We learned a lot as the No. 2 U.S. electric vehicle brand about what customers want and value, and what it takes to match the best in the world with cost-efficient design,” explained Ford President and CEO Jim Farley, with No. 2 being a veiled reference to the longstanding No. 1 EV brand in the US, Tesla.

Tesla launched into the market 14 years ago with a generous loan from the US government, aimed at keeping the US auto industry competitive with overseas companies in the global advanced vehicle market.

That aim has been partly realized, but US automakers are facing a new wave of overseas competition. Chopping down the persistently high cost of an EV battery would help make a difference.

“An affordable electric vehicle starts with an affordable battery,” Farley explained. “If you are not competitive on battery cost, you are not competitive.”

The Fall Of The Sedan & The Rise Of The LFP EV Battery

In terms of lessons learned from the No. 1 EV brand about the US market, Ford’s new electrification plan reflects an awareness that today’s car buyers love pickup trucks, whether or not they use them to pick anything up besides groceries. The market for small commercial vans is also running hot. These trends dovetail with the growth of gig work, side hustles, and small businesses in the US. Many households could use a family car that doubles as a work vehicle. Sedans can fit the bill for some jobs, but a larger, more practical vehicle is a necessity for others.

With this in mind, an expensive, top-of-the-line EV battery with a super-high range is not a particular priority for the current wave of EV buyers. In contrast to early adopters, Farley notes that today’s buyers are “looking to electric vehicles as a practical way to save money on fuel and maintenance, as well as time by charging at home.”

That’s where the new lithium iron phosphate (LFP) EV battery comes in. The iron phosphate part of an EV battery replaces more expensive materials like nickel and cobalt. Unlike the supply chain for conventional lithium-ion batteries, LFP batteries can rely on domestic sources (see more LFP background here).

All the way down at the bottom of yesterday’s press release — about 30 paragraphs down — Ford finally drops this nugget:

“Lithium iron phosphate (LFP) battery production is on track to begin in 2026 at BlueOval Battery Park Michigan – America’s first automaker-backed LFP battery plant – qualifying for Inflation Reduction Act benefits and giving Ford one of the lowest-cost battery cells in North America.”

A New EV Battery For The New Mystery Truck

As for which EVs will get the new LFP battery, Ford dropped a hint into yesterday’s announcement, when the company updated the timeline for its “T3” next-generation mystery truck. Ford teased the T3 truck project last year, noting that development team chose T3 — “Trust The Truck” — as the project code name.

“The team’s single guiding principle has been to create a truck people can trust in the digital age – one that’s fully updatable, constantly improving, and supports towing, hauling, exportable power and endless new innovations owners will want,” Ford explained in a press release dated March 24, 2023.

In yesterday’s press release, Ford explained that it expects the T3 to roll off the assembly line in the second half of 2027. That’s later than originally planned, but the timing will coincide with a next-generation EV battery, LFP or not.

“Retiming the launch allows the company to utilize lower-cost battery technology and take advantage of other cost breakthroughs while the market continues to develop,” Ford explained.

To Hybrid Or Not To Hybrid? Or To Fuel Cell?

For the most part, the remainder of the press release explains why Ford is taking a big financial hit in some areas in order to re-focus attention on the demand for hybrid vehicles of one sort or another, including three-row SUVs and the next generation of its F-Series Super Duty pickup.

Doing the math, Ford calculates that a larger vehicle requires a bigger EV battery pack, which makes it more expensive. The idea is to provide more affordable options by pairing smaller battery packs with internal combustion engines. That’s a less than ideal solution in terms of rapid electrification, but it does fit in with the household vehicle-as-a-multitasker concept.

Conspicuously absent from yesterday’s announcement was any mention of a fuel cell electric vehicle, which is another way of resolving the EV battery cost issue. Fuel cell vehicles don’t eliminate batteries altogether, but they don’t require a large battery pack for propulsion.

On the down side, fuel cells are expensive, and so is the hydrogen fuel that makes them go. The Biden administration’s new $7 billion Regional Clean Hydrogen Hubs program could help take some of the sting out, particularly in regards to the cost of green hydrogen from renewable resources.

Meanwhile, the emerging consensus is that fuel cell passenger cars are a non-starter in the US market. However, fuel cells could still find a foothold among heavier classes of vehicles that require more power, and Ford has been investigating that option as well.

Back in 2022, CleanTechnica took note of a forthcoming pilot test for Ford’s F550 fuel cell prototype work truck, in collaboration with the firm Ferguson Enterprises. Southern California Gas is also part of the project, under the umbrella of the Energy Department’s “Super Truck 3” heavy-duty truck decarbonization program. In an update issued earlier this year, SoCalGas indicated that the truck project is on track for operation in 2025.

While that’s on the back burner for the US market, Ford is also launching fuel cell electric trucks overseas, so stay tuned for more on that.

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Image: Ford Motor Company is banking on a new, low-cost LFP EV battery formula to support its EV sales strategy (courtesy of Ford).