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Electric vehicles overtake phones as main demand for cobalt

Electric vehicles overtake phones as main demand for cobalt

Demand for cobalt grew an unprecedented 22 percent last year, with electric vehicles (EVs) overtaking other battery applications for the first time to become the top end-use segment.

In 2021 alone, demand grew by 32,000 tons, with EVs accounting for 59,000 tons, or 34 percent of the demand, according to one report released by the Cobalt Institute

“As electric vehicles continue to revolutionize green and sustainable mobility, cobalt-based batteries are a technology of choice for many automakers in Europe, North America and China,” said President Adam McCarthy.


Global electric vehicle sales doubled in 2021 compared to 2020, with half of the cobalt demand coming from the industry by 2026.

Cobalt is an essential raw material used in the cathodes of batteries for electric cars, but with the price hikes last year for both cobalt and nickel, discussions about the use of cobalt-free batteries have increased.

While the market share of cobalt-free lithium iron phosphate cathodes is increasing, last year 74 percent of the global EV battery market was accounted for by cobalt-containing battery chemistry. “This is largely due to their superior energy density, safety and performance guaranteed by cobalt,” states the Cobalt Institute.

Cathode chemistry of top EV models.

Chart via the Cobalt Institute.

“Looking ahead, cobalt demand is expected to continue growing rapidly as the EV transition accelerates,” the report reads. “Supply will keep pace with demand in the near term, but supply chain bottlenecks remain a key risk.”

Demand for cobalt is expected to approach 320,000 tons in the next five years, up from 175,000 tons in 2021, with 70 percent of the growth expected to come from the EV sector.

“From 2024, the market is expected to shift back into deficit as supply growth does not keep pace with demand,” explains the Cobalt Institute in the recently shared paper. “Prices will remain high to stimulate further investment and prevent large deficits from developing.”

After a decline in 2020, the supply of cobalt mines increased by 12 percent year-on-year to 160,000 tons. The Democratic Republic of Congo remained the largest producer, accounting for 74 percent of global production and 87 percent of annual growth.

Meanwhile, refining was led by China, followed by Indonesia, which the Cobalt Institute cited as the largest growth market for refined cobalt production. The country is expected to provide a quarter of total refined cobalt growth in the medium term.

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Securities Disclosure: I, Priscila Barrera, do not currently have any direct investment interests in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The views expressed in these interviews do not reflect the views of the Investing News Network and do not constitute investment advice. All readers are encouraged to conduct their own due diligence.

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