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Cobalt Shortage Could Threaten EV Sales Plans
The auto industry’s plan to drastically boost its output of electrified cars could stumble over a shortage of cobalt needed for EV batteries, the Financial Times warns.
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The auto industry’s plan to drastically boost its output of electrified cars could stumble over a shortage of cobalt needed for EV batteries, the Financial Times warns.
Cobalt prices have nearly doubled this year. Edinburgh-based energy consultancy Wood Mackenzie Ltd. predicts global demand for cobalt in EV batteries will quadruple by 2020 and grow elevenfold by 2025.
Carmakers have been scrambling with little luck to lock in multi-year supplies of the metal, 60% of which is mined in the politically volatile Democratic Republic of Congo. Last month Volkswagen AG offered a relatively low fixed price for at least five years’ of supply but got no takers.
Traders point out that a continued run-up in cobalt prices will erode demand and prompt battery producers to search for a substitute material. Analysts tell FT they expect that producers and carmakers eventually will work out some sort of flexible-price supply scheme.
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