The electrical vehicle ecosystem across the globe is heavily reliant on lithium-ion batteries. And any talk on lithium-ion batteries cannot miss mention of Cobalt – a key component of lithium-ion batteries. The importance of Cobalt – a byproduct of copper and nickel – has enhanced like never before - in fact, prices of Cobalt have skyrocketed in recent times. The price of Cobalt rose sharply in 2017 and early 2018 and remains more than double its price at the end of 2016. As per Bloomberg NEF estimates, the global demand for cobalt could be 47 times more by 2030.
Further, it is estimated that global sales of electric cars is expected to touch 11 million by 2025, 30 million by 2030 and 60 million by 2040. These forecasts clearly tell a story about how Cobalt will attract increasing demand across the globe. In fact, the lack of widespread availability of Cobalt has emerged as a huge concern for electric vehicle manufacturers across the globe and why? Simply because more than 66 % of Cobalt is mined from Democratic Republic of Congo (DRC) – a country where sustained availability of the Cobalt is questionable given the tumultuous socio-political climate. Of course, Cobalt is mined in countries like China, Russia and Australia, but there are apprehensions that more much more is needed to be done to ensure large-scale availability of Cobalt for electric vehicles.
Further, there is a line of thought that the EV space could witness cobalt supply deficit given the ever-growing demand for electric vehicles based on lithium-ion batteries. According to projections published by the Joint Research Centre, the in-house science service of the European Commission, Cobalt is expected to be in short supply from 2025.
Automobile companies such as BMW Group, General Motors Company and Nissan Motor Company are gung-ho about transitioning to electric vehicles, but the limited availability of Cobalt could throw a spanner in their works.
Ivan Glasenberg, CEO, Glencore - the world’s largest Cobalt producer – has gone on record saying that the world is aware about the geological scarcity of cobalt and admitted that the supplies of Cobalt were “relatively constrained” because it cannot be mined like lithium, as it comes as a byproduct of mining copper and nickel.
It remains to be seen whether electric vehicle manufacturers can find newer ways to minimise the use of Cobalt in lithium-ion batteries or find other alternatives for electric vehicles.