EVs are the talk of the town, with $TSLA & any company remotely related to electric vehicles surging daily. Investors and consumers have been keen to ride the wave, but what really made this cutting edge technology available to the masses?
Well, its largely the batteries!
Lithium Ion battery prices have plunged almost 90% in the last decade! This has finally made the Electric Vehicles business, one that could generate meaningful revenues & profits..
Future looking all sunny right? Well not quite…
There’s a growing concern that battery production won’t be able to keep up with consumer demand for EVs, now that the tech has become so desirable.
Batteries are made up of multiple minerals like Lithium, Graphite, Copper, Aluminium, and Cobalt. In particular, Cobalt is a raw material that helps pack more energy into cells, which is crucial to achieving longer driving ranges as it stands.
What’s important to note here is, Cobalt is not easily available, and its supply is a huge constraint to EV production & the consequent adoption.
In fact 50% of world’s production of cobalt comes from the Democratic Republic of Congo (DRC), where it’s tied to armed conflict, illegal mining, and harmful environmental practices.
“We’re realizing that the Congo is to [electric vehicles] what Saudi Arabia is to the internal combustion engine,” says Trent Mell, chief executive of exploration company First Cobalt Corp. , based in Toronto.
China, to their credit, have been incredible farsighted in their drive to vertically integrate cobalt mining in their supply chains. For the last two decades, China has invested heavily in cobalt mining operations in Africa. According to a recent study, by the Organisation for Economic Co-operation and Development (OECD), 8 of the 14 largest cobalt mines in the DRC are Chinese-owned and account for almost half of the country’s output.
With demand for cobalt expected to grow as the world moves to a greater reliance on renewable energy and electric vehicles, talk about focusing more on long term goals over short term profits!
Much more on this in our conversation on the supply chains of batteries & how it poses a risk to the burgeoning electric vehicle era.