The Strategist

Electric cars become major source of cobalt demand for the first time

05/18/2022 - 09:41

Electric cars have become a major source of cobalt demand for the first time, overtaking smartphones. Experts warn of risks of cobalt shortages after 2024.

Tony Webster via flickr
Tony Webster via flickr
Electric cars have overtaken smartphones and computers for the first time to become the top source of cobalt demand by 2021, the Financial Times said, citing a report by the Cobalt Institute. Cobalt is a by-product of copper and nickel mining, a rare metal that is used in lithium-ion batteries.

The automotive industry used 59,000 tonnes of cobalt last year amid rising sales of electric and hybrid cars - accounting for 34% of total demand, the FT points out. Meanwhile, 26,000 tonnes of cobalt was used in mobile phone manufacturing and 16,000 tonnes in laptop and tablet manufacturing. Total demand for cobalt in 2021 was 175,000 tonnes, while 160,000 tonnes were mined.

As electric vehicle production rises, so do concerns about possible supply shortages of key battery metals, particularly cobalt, lithium and nickel, the FT points out. The automotive industry is expected to account for half of cobalt demand by 2026.

Nearly three-quarters of cobalt is mined in Congo, which is dominated by Chinese companies and the world's largest cobalt producer Glencore, the FT points out. The country produced 118,000 tonnes of the metal last year. Australia is second in production, but only 5,600 tonnes were produced there.