unauthorised investment advice 9 hours ago | Angela East Elon Musk’s bearish...

unauthorised investment advice

9 hours ago | Angela East


Elon Musk’s bearish comments on cobalt last week appear to have impacted ASX cobalt stocks — but the Tesla boss hasn’t deterred local juniors from further investments in the battery metal.
Mr Musk said he would phase out the use of cobalt in his Tesla electric car batteries. Our table below shows about two-thirds of ASX-listed stocks with exposure to cobalt are down compared to two weeks ago.
But several analysts have poured cold water over Mr Musk’s comments.
Equity research firm Cannacord Genuity went as far as suggesting now was the perfect time to start investing in or increasing exposure to battery metals stocks.
“In our opinion this [comment by Mr Musk] was an attempt by the company to distance itself from market concerns about cobalt supply, which is dominated by mined production from the Democratic Republic of Congo,” Cannacord said in a note to clients.
More than half the world’s cobalt comes from the DRC, which has been black-listed over ethical issues such as child labour.
While Tesla was the “sentimental poster-boy for electric vehicles in North America”, it accounted for only 8.4 per cent of the global electric car market in 2017. Other car makers are focused on battery technologies that require more cobalt.
Cannacord says it has already factored the trend toward lower cobalt content into its supply and demand model – as have other market observers.
“From our perspective, the supply and demand outlooks for both cobalt and lithium are very positive based on burgeoning demand for EVs and energy storage systems,” Cannacord said.
“We view the current correction as an excellent entry/re-entry point for exposure to battery materials equities.”