Only a few years ago, there were popular predictions that we would run out of oil, whereas today it, appears more likely that oil markets will suffer from peak demand, not supply. Similar arguments about resource scarcity have surfaced widely in anti-renewable propaganda, with concerns expressed about rare earths, lithium and other materials as easily debunked reasons why solar, wind and energy storage cannot scale.
Some of these concerns could have been valid, were it not for the ceaseless innovation in the solar and wind industries. However, there is one material that does pose a real problem today, and may continue to in the long run, to the lithium-ion batteries used in electric vehicles and stationary energy storage: cobalt.
In this case, it is not so much that cobalt is rare; but rather the difficulty of opening enough mines fast enough, and that roughly half the global supply is located in the notoriously unstable Democratic Republic of the Congo.
Increased cobalt use for lithium-ion batteries has led to stockpiling of the material, and dramatic price increases. From 2013 through the end of 2016, cobalt had traded in a range between $10-15. Starting in early 2017, the price has run up about 300% and peaked at over $43 a pound in March.
And now, one of the world’s largest makers of lithium ion batteries has announced that it is finding alternatives to the troublesome element. Panasonic, the premier supplier of automotive batteries to Tesla, has stated it is on the move toward eliminating cobalt from its batteries.
We have already cut down cobalt usage substantially. We are aiming to achieve zero usage in the near future, and development is underway.
This announcement follows Elon Musk stating in recent earnings call that “we think we can get cobalt to almost nothing”.
In a graphic developed by the Benchmark Mineral Intelligence Blog, the original Roadster and Model S used ~24 pounds of cobalt per vehicle, while a similarly sized battery pack in a Model S today would use a bit over 15 pounds per vehicle. The Model 3, with its smaller battery pack, uses just under 10 pounds per vehicle.
From the original Roadster and Model S days to today’s Model 3 is a total drop, per vehicle, of 59%. The original Model S had a range of approximately 208 miles for the 60 kWh battery and 265 miles for the 85 kWh battery. Today’s Model 3 has a 75 kWh battery with a range over 300 miles.
Since Elon Musk’s press conference and the Panasonic communication, the price has stayed mostly flat, though, the price has fallen off by just over 6% since the March peak.
At current market prices, a Model S has $984 worth of raw cobalt in it and the Model 3 about $420 worth. The Model S retails for $70,000-100,000, while the Model 3 hopes for a mass market price of $35,000 per unit, however, current models available range from $45,000 to $78,000.
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