Lithium-ion batteries contain a number of different materials including lithium, nickel, aluminum, iron, manganese and cobalt. Of all these metals, cobalt is the most expensive. For the past four years, the average cost of cobalt was higher than the cost of all the other battery metals put together.
“For mass electrification to happen, there are lots of sentiments that cobalt needs to be eliminated or reduced to the bare minimum,” says Chibueze Amanchukwu, professor of molecular engineering at the University of Chicago.
The price of cobalt has also historically been very volatile. Part of this volatility is because cobalt is usually produced as a byproduct of nickel and copper mining, and therefore tied to the demand and price fluctuations of those metals. The mining and refining of cobalt is also geographically limited.
“The majority of the world’s battery-grade cobalt reserves are located in the Democratic Republic of Congo, where the the mining of cobalt is associated with human rights abuses and child labor,” says Sam Adham, a senior powertrain research analyst at LMC Automotive.
Chinese investors control about 70% of Congo’s mining sector. China also has over 80% control of the cobalt refining industry, where the raw material is turned into commercial-grade cobalt metal suitable for use in EVs. In light of the U.S.-China trade war, cobalt supply is in a precarious position for U.S. manufacturers.
Some cobalt-free batteries do already exist, but they require some trade-offs.
“There is already a viable cobalt-free battery and that is lithium iron phosphate or LFP. But the main downside of LFP is low energy density and therefore driving range,” says Adham.
Read more about clean energy from CNBC Pro
LFP batteries have improved, leading more car manufactures to adopt the technology, which is far cheaper than batteries with cobalt. Tesla already uses LFP batteries in the Model 3 and Model Y vehicles it manufactures in China. And Tesla says it will now expand use of LFP batteries to all its entry-level Model 3 and Model Y vehicles .Ford and Volkswagen have also said that they would offer vehicles with LFP batteries.
Like with cobalt, the supply chain of lithium iron phosphate, or LFP, batteries is dominated by Chinese companies like BYD and Contemporary Amperex Technology Limited, or CATL. In an effort to reduce U.S. dependence on foreign countries, the U.S. Department of Energy released a national blueprint in June to help guide investment to develop domestic lithium battery manufacturing and support further R&D. Among its goals, the blueprint calls for eliminating cobalt from lithium batteries by 2030. Two U.S.-based start-ups, Sparkz and Texpower, say that they can help, though the companies have yet to prove out their technologies in electric vehicles.
Watch the video to find out more about what technologies companies are using to curb the industry’s dependence on cobalt-containing batteries and how eliminating cobalt can make EVs cheaper.
Correction: After this video came out, CEO Evan Erickson said TexPower is building a facility that will be able to produce hundreds of tons of material per year. He said he misspoke in the taped interview.