The exclusive demand for electric and hybrid vehicles and the world’s ambition to go electric in the coming years has resulted in the rise in the prices of an element cobalt. Cobalt is a key ingredient in the lithium-ion batteries that will be used to run an electric vehicle.
In fact, the best lithium battery cathodes all contain cobalt, and its production is limited. Prices for the metal more than doubled in 2017 over the previous year, according to the United States Geological Survey.
Lithium battery cathodes are made of layers of lithium metal oxides that contain some combination of cobalt and other metals. The metal’s atomic properties let cathodes pack a lot of energy into a small space and help to maintain the cathodes’ layered structure. Moreover, cobalt is a by-product of copper and nickel mining, so its production depends on the demand for those metals.
The companies have started to look for alternatives to get cobalt for themselves. According to CNBC, Apple is trying to procure its cobalt directly from miners. Automakers such as BMW and Volkswagen have also been taking similar steps.
Moreover, mining companies such as ERG and Glencore are planning new cobalt operations that may balance supply and demand in the near term.
According to U.K.-based cobalt trading firm Darton Commodities, the demand for cobalt is expected to grow more than 40 percent in 2018. Cobalt could be tough to replace. There might be potential substitutes but in some cases, it may lead to poor performance.