Cobalt Price May Be Key To Electric Vehicle Growth

By Douglas A. McIntyre Published Nov 23, 6:30AM EST

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Sales of electric cars have surged in most developed economies around the world and are expected to be well into the billions per year by the end of the decade. One element which could hamstring future growth is the price and availability of Cobalt, a chemical element which is refined via smelting.

Duff Lu, a research manager of EnergyTrend, a division of TrendForce reports.

The price of cobalt has gone higher season by season in 2017 due to the surging demand for batteries with the rapid development of NEV. Lu does not expect the cobalt price to keep rising in 2018, but it remains a key concern for the supply chain. In long term, battery makers and vehicle manufacturers will seek solutions, e.g. vertical integration, for secured supply to prevent further large fluctuation in price that may impede the development of the industry.

TrendForce points out that

The demand for xEV battery in China sees significant growth in 2017 due to carmakers’ acceleration into electric vehicles production. The global xEV battery demand expects a steady growth from 2 billion units in 2017 to 2.5 billion units in 2018, a Y0Y increase of 24%.

China is the world’s largest vehicle market by far.

Many large electric vehicles use xEV batteries. Most passenger cars use NMC battery, but the eEV market is expected to continue to surge.

Metal price routinely affect the prices and margins for passenger and commercial vehicles. In the case of electric cars, the near term price problem is with cobalt.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.