A 20 percent surge in cobalt cost since the start of this year demonstrates how global supply chains are strained by the rush to create more electric cars. A lack of semiconductors has also hampered the recovery in car demand. As per individuals in the car and battery industries and researchers, cobalt, a blue metal required for many forms ofÂ batteries, including those in Electric Vehicles, is a problem. The market is not going to decline any time soon. However, the supply stays tight primarily due to logistical fluctuations during the disease outbreak in South Africa,” stated Ying Lu, a researcher at Roskill, a commodity research firm based in London. As the stabilizer in batteries, energy-dense cobalt is utilized.
In Congo in central Africa, the bulk of the globeâ€™s cobalt is extracted. It is usually exported overland to South Africa, delivered from Durban Port, South Africa, and refined in China until the commodity goes to the battery manufacturers, which means there are many choke spots in the distribution chain, making it prone to interruption. In 2017 as well as 2018, the cost of cobalt quadrupled in a span of two years until an increase in supply cooled the demand down amid an earlier surge in demand in EVs. The latest movements arenâ€™t as dramatic, but as of January 21, as per Futuresource, the spot cost of cobalt increased to $38,520 for every ton, up 20 percent from the end of December.
Bidenâ€™s presidential election and recent measures by Japan and China on climate change have intensified the transition towards electric cars. Tesla has said that ten years from now, a 40-fold improvement from last year, it plans to create 20 million vehicles yearly. More EVs indicate additional batteries. As per a study published by the Guotai Junan Securities Company based in China, last year, they account for around 40 percent of an EVâ€™s expense. Analysts claim that in batteries, cobalt is by far the most costly element. Car and battery manufacturers have been searching for greater leverage of their cobalt stock and means of entirely eliminating the metal.
In 2020, Honda Motor Company made a partnership with Contemporary Amperex Technology Company limited, Chinaâ€™s top car-battery producer, hoping that the supply-chain clout of CATL would help secure Hondaâ€™s battery supply. A Honda spokesperson said the two are now exploring options to cobalt as well as other expensive materials. A spokeswoman for the Panasonic Corporation, a Japanese electronics manufacturer and has a joint battery-making partnership with Tesla, stated that it planned to produce cobalt-free batteries in large in a period of two to three years volume, a target previously reported by Tesla CEO Elon Musk.https://thebrockvilleobserver.ca/