Technology and battery metals
and more powerful batteries. It is expected that growth will continue at 4.5% in the next 3 years, being purely driven by battery demand.
Demand for cobalt from EV battery demand is currently taking up 15% of total cobalt demand, a sharp rise from 5% in 2016, before EVs started to be mainstream.
As a consequence of the high prices, however, EV producers have looked for technology to reduce the cobalt content in lithium-ion batteries. In May 2018, Tesla co- founder Elon Musk warned that ‘We [Tesla] think we can get cobalt [in their lithium-ion batteries] to almost nothing’. This led to demand for cobalt dropping, as investors started being sceptical for the need of cobalt in the future. The drop in price was also in no small part thanks to metal traders over-hyping EV growth rates, creating expectation in other investors and leading prices to rocket as some started to stockpile (especially in China), hence helping to increase their profits earned. This inevitably led to price drops as investors began to realize EV growth rates were not as high as forecasters were hyping them up to be: prices were bound to fall back to a more reasonable level.
In addition to this drop, by the law of supply and demand, we can then understand why prices plummeted in 2018;
When both supply increases and demand decreases, there will be a sharp drop in the price of the good (cobalt)
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