Battery builders get the cobalt blues

Chinese electric car [image credit: scmp.com]

One battery expert said: ‘I’ve had multiple Chinese carmakers in my office really worried [about cobalt supply]. They wish they’d thought about this two years ago.’ They find themselves bidding against the likes of wealthy companies like Apple and Samsung for supplies.

Demand for battery metals surges on the back of a global appetite for electric vehicles, reports ChemistryWorld.

At the beginning of 2017, $32,500 (£26,300) would buy you one tonne of cobalt. Today you’d have to fork out $81,000. Since 2016, cobalt’s price has spiked enormously, and it’s all because of batteries.

Cobalt is an essential component of the lithium ion batteries that power our phones and laptops, and which are expected to be a key part of the world’s energy mix. ‘In 2017, we saw demand from the battery sector at 102 GWh, but we expect that to increase to 709 gigawatt hours by 2026,’ says Caspar Rawles, market analyst at Benchmark Minerals Intelligence.

That demand comes from consumer electronics and using batteries as grid storage for renewable energy sources. But by far the biggest driver is electric vehicles, with governments around the world looking to make the switch from petrol and diesel.

In July 2017, the UK announced plans to phase out sales of new petrol and diesel cars by 2040, and the EU is tightening carbon dioxide limits to incentivise a shift to electric vehicles.

Meanwhile, India plans to replace its entire car fleet with electric models by 2030. In California, the official target for electric vehicles is 5 million by 2030. And in China, where electric vehicles are seen as a solution to its smog-ridden cities, subsidies are offered to consumers and a reward system for manufacturers is being introduced.

Consumers will be able to choose from an expanding range of models. All will be powered by the lithium ion battery, the battery of choice for General Motors, Honda, Tesla, BMW, Ford, BYD and Nissan.

Each time battery prices decrease, the competitiveness of electric closes in on the internal combustion engine.

Immaterial costs
But the cost of the lithium ion battery will determine how quickly electric cars roll out, because it can be up to half the cost of a purely electric vehicle. Material prices were less important when lithium ion battery costs were $1,000 per kWh around 2010, but as prices near $100 per kWh (they are below $140 today) the basic material costs now make up 70% of the total cost of a lithium ion battery.

‘For the first time we have seen large-scale battery manufacturers increase their prices. That has largely been down to the price of key commodities such as lithium and cobalt,’ explains Rawles. ‘Cobalt has a big impact and that is one of the big talking points for the industry right now.’

Cobalt’s price has rocketed because the increased demand from big battery makers, electronics manufacturers and auto companies is putting pressure on a supply that is constrained by several factors to do with economics, politics and geography.

Continued here.