Technology and battery metals: How the resurgence of electronic cars has affected the cobalt market
Wesley Fong
1. The Evolution of Electronic Vehicles and Lithium-ion Batteries
During the early development of automobiles in the late 19 th - early 20 th centuries, electronic cars were extremely popular, especially amongst affluent customers and cab drivers, largely due to their ease of use over steam and gasoline powered cars, and their large and luxurious carriages. However, by the 1920s electronic cars were practically abandoned for the much faster and effective automobiles, much more resembling of the modern car. Electronic vehicles (EVs) were largely forgotten until the start of the 2000s, when the danger of global warming and pollution became much more obvious. A brochure published by the U.S. Department of Energy in 2001 highlighted the issue of petroleum-based fuel- powered cars and suggested alternate fuel sources, including hybrid electric vehicles – then recently developed by Honda and Toyota – and the possibility of a resurgence of fully electric-powered vehicles. This helped to boost entrepreneurs and scientists to develop the first modern highway-capable electronic cars. In 2004, Tesla Motors began development on the first legal all-electric highway-capable car, using lithium-ion battery cells, a newly developed rechargeable battery that was vastly superior to its predecessor (NiH 2 batteries). This was sold to a small amount of buyers between 2008 and 2012. Tesla Motors continued to refine this new breed of electronic cars and have pushed for the first mainstream retail of these cars in 2016, leading other car companies to develop and produce all-electric cars. With environmental awareness more acute than ever, these all-electric cars have skyrocketed in popularity. This transition from petroleum-based fuel powered cars to electric cars have largely been thanks to the aforementioned lithium-ion battery cells, which allowed electric cars to go faster and last much longer, reviving consumer interest in electric cars. With the rapidly rising demand for electronic cars, it is natural that demand for rechargeable batteries will also be driven up – in particular, demand for lithium-ion batteries.
2. Battery Metals and their Respective Markets
The battery metal market refers to the main input metal commodities in the production of batteries; lithium, nickel and cobalt. In the current development of lithium-ion batteries, lithium nickel manganese cobalt oxide (NMC) batteries are primarily used for rechargeable car batteries, meaning that these metal markets are the most affected by the booming electric car industry. However, the effects deriving from this increased demand from electric cars is both unclear and misleading when studying the lithium market owing to NMC battery production not being a large enough proportion of the lithium market. This is even more the case for nickel, as its sheer size and many uses dilutes the influence of electric cars on the market. As a result, it is most appropriate to study the effects of derived demand from rechargeable batteries on the cobaltmarket. As of 2016, 51%of cobalt is used for lithium- ion batteries, while being a relatively small market, not exceeding 95,000 metric tonnes (MT)
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