Volkswagen’s failure to secure long-term cobalt supplies has highlighted concerns over one of the most precarious elements in the lithium-ion battery supply chain.
There is sufficient cobalt worldwide to meet foreseeable demand for the mineral, according to Caspar Rawles, an analyst at Benchmark Mineral Intelligence. The real question “is whether we can access it quickly enough,” he said.
Volkswagen last month sought to secure a €50 billion ($59 billion) contract to supply enough cobalt for 150 gigawatt-hours of lithium-ion battery storage by 2025, which Rawles said could amount to roughly 30,000 tons of the metal a year.
“To put that into perspective, the refined material supply globally for cobalt last year was 93,000 tons,” he said. “It’s approximately a third of last year’s entire global supply. When you look at it like that, you start to think there are potentially problems going forward.”
The German carmaker failed to find a supplier that would guarantee even five years of cobalt at a fixed price, the Financial Times reported this week. But that possibly says more about market dynamics than the possibility of a supply-chain breakdown.
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