Ford increases its battery supply to meet its electric-vehicle goals.

Ford Motor Co. said Thursday that it had agreed to acquire a battery pack from a Chinese supplier while competing to expand global production of electric vehicles.

The automaker has announced that it will begin purchasing battery packs for electric vehicles produced in North America and elsewhere from Contemporary Amperex Technology Company Limited next year. The Chinese company, known as CATL, is the world’s largest battery producer and is often regarded as the most important player in the electric vehicle industry after Tesla.

The announcement highlights the dominant position of Chinese companies in the electric vehicle supply chain. Electric vehicles are critical to controlling climate change and allowing the world’s largest automakers to compete with Tesla. According to research firm Benchmark Intelligence, China produces about 80% of the cells that power lithium-ion battery cells.

Ford also said it would buy more battery packs from two South Korean companies, LG Energy Solution and SKOn, which are building a plant in Georgia and working with Ford to build three other companies in the United States.

All the agreements are part of Ford’s push to produce 600,000 electric vehicles a year by the end of 2023, which will be a sharp increase from current power levels.

In addition to dealing with battery makers, automakers have said they are working directly with mining companies to secure a supply of raw materials such as lithium and nickel from countries such as Canada, Indonesia and Australia. The prices of these and other metals needed to manufacture batteries have skyrocketed this year due to strong demand from the automobile industry and the Russian war in Ukraine.

Ford was slow to adopt an electric vehicle, but this year it gained some position from Tesla, which dominates the market. Two models that make up the majority of Ford’s recent profits are the Mustang Mach E, an electric sports utility vehicle, and the F-150 Lightning, an electric version of the popular full-size pickup truck. In the first half of this year, Ford sold 17,675 Mach Es in the United States and 2,296 Lightnings between April and the end of June.

By 2024, Ford hopes to produce 270,000 Mach Es annually in North America, Europe and China, 150,000 Lightnings in North America, and 150,000 electric transit vans in North America and Europe. We are also aiming to add a new electric SUV to Europe, aiming to be able to produce 30,000 units a year by the end of 2024.

Ford CEO Jim Farley said in a statement that the company is adding battery suppliers to meet the strong demand for electric models. “We are currently implementing an industrial system for rapid expansion,” he said.

Ford also diversifies the types of batteries it uses. CATL supplies battery packs that use lithium iron phosphate (LFP). This is the battery cell that Ford will produce the Mustang Mach E in North America from next year and will use it for the F-150 Lightning in 2024.

Ford said it has signed a memorandum of understanding with CATL to discuss further cooperation on batteries for Ford’s operations in China, Europe and North America. He added that he plans to add a source of LFP cells in North America by 2026, but did not provide details.

Tesla has recently begun to rely more on LFP batteries, which are cheaper than batteries that rely on raw materials such as nickel but cannot hold that much energy. Ford said it expects LFP cells to reduce battery material costs by 10 to 15 percent compared to currently used cells containing nickel, cobalt, manganese, or NCM.

The company said LG Energy Solution is increasing production of NCM battery cells at its Polish plant to supply batteries to the Mustang Mach E and E Transit vans.

Ford said SK ON is working to increase production of NCM cells for the F-150 Lightning at its Georgia plant. SK On and Ford have previously announced plans to build two battery plants in Kentucky and a third in Tennessee.