Interesting times ahead. VW failed to secure cobalt supplies as was reported last year Wonder why? VW fails to secure long-term cobalt supply for electric vehicle push
16 October 2017
As it prepares to launch a new range of electric models onto the automotive market by 2025, Volkswagen (VW) has failed in its attempt to secure a long-term supply of cobalt from one of the world’s leading suppliers of the material.
Vehicle manufacturers will require large amounts of cobalt in order to develop the li-ion (lithium ion) battery that powers electric vehicles (EVs). These will require much larger quantities of raw materials than those found in smartphones and iPads. This is challenging small markets for lithium and cobalt, which have seen dramatic price rises.
More than 60% of cobalt is mined in the Democratic Republic of Congo, which has raised fears among automakers over security of supply. Prices have jumped by around 80% since the start of 2017, meaning car makers are looking to secure long-term supplies at favourable prices in order to bring in large quantities of the raw material for battery development.
Production has slowed due to rarity and issues in the DRC
Global production of cobalt last year was 110,000 tonnes.
UBS expects global sales of electric vehicles in 2025 to reach 14.2 million units or 13.7 percent of the total from under one million units and less than one percent this year.
Analysts at CRU Group forecast the battery sector will need more than 75,000 tonnes of cobalt a year by 2025, up from around 41,000 tonnes this year.
Analysts estimate each battery uses between 8-12 kg of cobalt. That would mean VW will need 24-36 million kg a year for three million EVs.
So in other words once VW is in production of EV's there will be a huge shortfall in cobalt. If VW alone need 24,ooo to 36,000 tonnes of cobalt a year that is up to 30% of the worlds cobalt supply.
We are not even delving into grid and home storage which will be huge and require vast amounts of cobalt.
IMO VW has no choice but to go with Magnis hence the reported meeting in the news article that came out recently. They must check out all avenues. It looks like Magnis is one of them
(20min delay)