It’s Ford’s lithium deals that have generated most of the column inches this week in battery raw materials circles and, while we have opinions on those, we also note that it was what was left unsaid in Ford’s presentations that concerned us most.

Most notably insofar as there were no mentions of offtakes for anode materials, high purity manganese and lithium iron phosphate, all of which are key components of the EV batteries that Ford has said it intends to use ex-China, and all of which are set to experience significant supply/demand imbalances.

But that is by the by. Another area of concern for us was Ford’s comments (or lack of them) on nickel.

Buried away on p82 of the presentation was a slide on nickel. In the slide, Ford noted that it planned to save US$5.50/kg on nickel sulphate for EVs, which would generate a saving of c.US$200m at 45GWh of capacity. Ford was presumably referring to the agreement it’s made to JV with Vale and Huayou Cobalt to develop a nickel laterite project in Indonesia.

I don’t disagree with any of the economics described in the slide, but it’s what was not disclosed in the slide that I have a problem with. Notably that nickel production from laterite ores using the HPAL process is nearly FOUR TIMES more CO2-intensive than producing nickel using the traditional route of processing from sulphide ores.

So yes, Ford generates US$200m of savings, but at what cost? Well, the GHG emission cost is pretty clear – it’s an additional c.700,000 tonnes of CO2 per year.

What’s annoying about this is it’s not like there aren’t a plethora of sulphide-based nickel projects out there. Indeed there are a large number of sulphide projects seeking funding in North America; in the US itself and in Canada. There are even companies trying to develop projects to process laterites without using HPAL. General Motors has invested in one of these. We discussed the ESG approaches of OEMs in more detail in our Yearbook.

Ford is by no means the only Western World OEM guilty of going down the laterite route when the sulphide route is available and is more ESG friendly (Volkswagen is another notable one), and it’s also certainly not the only one that hasn’t properly outlined the environmental implications of its choice of processing routes either.

But with Ford and Volkswagen choosing a much more carbon-intensive source of nickel, and many Chinese carmakers happy with the NPI/matte route which is an order of magnitude more carbon-intensive than even the HPAL route, we do wonder how automakers think about ESG? Because it doesn’t seem to be the same way we think about ESG…

Matt Fernley is Head of Research for Westbeck Capital’s Volta Fund and Editor of Battery Materials Review.