By Paul Lienert

(Reuters) – Ford Motor Co expects to be the world’s second largest electric vehicle manufacturer within two years, with annual production capacity of nearly 600,000, a top company executive said Friday.

The automaker’s optimism stems from increasing demand for its next new EV, the Ford F-150 Lightning pickup, with retail reservations approaching 200,000, Lisa Drake, chief operating officer of Ford North America, said.

Reuters reported on Wednesday that Ford likely would be vying with Stellantis for third place in the EV race by 2025, behind Tesla and the Volkswagen Group, based on production forecast data provided by AutoForecast Solutions.

Speaking at an investor conference, Drake said Ford is working to vertically integrate more EV components, including power electronics and e-drives, at existing facilities that build parts for combustion vehicles – a modern take on founder Henry Ford’s pioneering work in building many of his own components.

“We haven’t used ‘vertical integration’ in this industry in a long time,” Drake said, but “you’re going to hear it a lot more” as Ford and other automakers transition from combustion to electric vehicles.

She said Ford working with five global battery suppliers to manufacture and help develop battery cells for its future EVs, aiming to build 240 gigawatt-hours of production capacity globally by 2030. Those suppliers include SK On, LG Energy Solution, CATL, BYD and Panasonic.

Ford expects to reduce EV battery cell cost to $80 per kilowatt-hour at the pack level “well before the end of the decade,” Drake said.

The automaker is looking at different cell chemistries, including cobalt-free lithium iron phosphate, and cell-to-pack structural batteries to help reduce costs.

Ford and BMW are working with Colorado-based startup Solid Power on developing solid state batteries, which Drake said should be commercialized “well before the end of the decade.”

(Reporting by Paul Lienert in Detroit; editing by Barbara Lewis)