The following article will give COB holders some more info about what to expect from Cobalt during the EV revolution.
In my opinion, Cobalt will continue to play a serious role when it comes to the high end of the market EV market.
On top of that Cobalt blue will also be able to sell its Ethical trademark.
Speculation about the potential explosion in the demand for electric vehicles (EVs) in the midst of the last decade saw the prices of some of the metals needed to produce the batteries capable of powering those vehicles more than doubling by 2018. Lithium, nickel, and cobalt led the charge, but when the speculation appeared to have arrived early on the scene, the price of lithium and cobalt began a downward slide that would not be reversed until late 2020.
In the face of the expectation of rapidly rising demand, commodity producers do what they do best – produce more and more, leading to an excess of supply and downward price movement when expectations slip off into an uncertain future. In this case the move was accelerated by mining shutdowns and slowdowns in the face of the pandemic.
For the EV revolution to reach its full potential, the cost of an EV must become competitive with comparable ICE (internal combustion engine) vehicles. EV producers and other corporate consumers of li ion batteries are continually looking for more cost effective battery chemistry formulations.
Tesla began with the Nickel/Cobalt/Aluminum (NCA) formulation, adding the NMC and now the LFP – lithium iron phosphate, or lithium ferrophostate.
There is no nickel or cobalt in the LFP battery, so newcomers to this sector might wonder why the prices of nickel and cobalt are not sliding if manufacturers are screaming for lower costs?
The nickel/cobalt formulations still offer some advantages over the LFP battery, most notably range and higher energy density, meaning better overall performance. Tesla is using the LFP battery on entry level models and will expand its use to all “standard” range models. Where distance and performance issues like acceleration matter, Tesla will continue using the NCA formulation, for now, but plans to expand LFP use in the future. Ford and VW also have begun using LFP batteries.
China is leading the way in LFP battery adoption and the LFP market share there has risen in concert with manufacturer cost concerns.
In addition, manufacturers are now getting more directly involved in mining and battery chemistry formulation. Multiple manufacturers are securing offtake agreements with producers of both cobalt and nickel to guarantee supply.
The debate over the advantages and disadvantages between LFPs and NCAs or NMCs rages, with an edge slipping to LFPs. Global resource research firm Wood Mackenzie is predicting li ion battery manufacturing capacity will increase fivefold by 2030, but that LFP’s total market share will eclipse the fifty per cent market share currently held by NCM batteries by 2028. The company pointed to LFP market share gains in 2021 through its lower cost, longer battery lifecycle, and better safety. Should that prediction materialise, what would happen to demand for Cobalt?
Other experts maintain a positive outlook for cobalt.
COB Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
