Road transport is undergoing a radical transformation with the switch from conventional to electric vehicles (EVs): as many as 130 million electric cars are expected to circulate worldwide in 2030, compared to 3.2 million in 2017. As a result, the worldwide demand for cobalt (a crucial element for the most common types of lithium-ion batteries used in EVs) could potentially increase threefold within the next decade, even assuming the future adoption of low-cobalt chemistries in EV-battery manufacturing, according to a report from the EU Joint Research Center (JRC).
In the EU, the yearly cobalt demand is already about nine times larger than the internal supply. The gap is expected to increase in the next decade, and the EU will continue to heavily depend on imports for the foreseeable future. While supply will meet demand until 2025, projections show shortages beyond this point in time, the JRC study says. Cobalt prices have already tripled between 2016 and 2018 and, since they account for a significant part of the battery production costs, a further escalation might also impact EV prices. Substituting cobalt with other metals is technically possible and could reduce the 2030 EV market demand by 29%; however, this will not be enough to fill the demand-supply gap alone.
As the EU further develops its battery manufacturing capacity, in the framework of initiatives such as the European Battery Alliance, the JRC study says it is crucial to secure adequate cobalt supplies and ensure that they are obtained sustainably. According to the JRC, some specific actions which could improve the cobalt supply stability in the future are:
•promoting domestic cobalt extraction and attracting private investments towards minerals exploration by improving the regulatory conditions;
•consolidating trade agreements with countries such as Australia and Canada, whose importance as cobalt producers is expected to increase in the future;
•ensuring that used batteries, including those from plug-in hybrid electric vehicles, are collected efficiently in order to boost cobalt recycling;
•exploring ways to bring low-cobalt battery chemistries and cobalt -free alternative technologies to the mass-scale market;
•monitoring the supply-and-demand situation of metals which could potentially substitute cobalt (e.g. nickel).