Tesla's Reason for Declaring 'Cobalt Zero'... Is In-House Battery Production Becoming a Reality?

Cobalt Faces Price Risks as Conflict Mineral
Tesla Plans to Acquire German Battery Assembly Company

[Asia Economy Reporter Hwang Yoon-joo] American electric vehicle company Tesla declared "Cobalt Zero" along with its plan to produce batteries in-house at the "Tesla Battery Day" held on the 22nd of last month (local time).

The main reason Tesla declared "Cobalt Zero" is that cobalt is a raw material with high price volatility. Cobalt is a mineral extracted as a byproduct from copper and nickel mines, with over 60% of the global supply produced by the Democratic Republic of Congo.

The Congo has been suffering from civil war over the past 3 to 4 years and has been hit hard by the Ebola virus outbreak since last year. Since the Congo effectively holds a monopoly in the cobalt market, disruptions in cobalt production there cause significant price volatility.

Additionally, the designation of cobalt as a "conflict mineral" due to child labor exploitation in Congolese cobalt mines is considered one of the major risks. Meanwhile, with the expansion of the electric vehicle market, global cobalt demand is expected to reach 240,000 to 430,000 tons by 2030. In contrast, cobalt production is projected to remain between 320,000 and 460,000 tons. This is why Tesla CEO Elon Musk declared "Cobalt Zero."

At the event, Elon Musk announced the plan to produce batteries in-house and stated that battery manufacturing costs would be reduced by 56% within three years compared to current levels. Tesla is steadily progressing with its in-house battery production plan. Tesla is set to acquire ATW Automation in Germany. ATW is a subsidiary of ATS, headquartered in Canada, which assembles and supplies automotive battery modules and packs.

Tesla is constructing its third automobile manufacturing facility, including a battery production plant, on the outskirts of Berlin, Germany. This year, Tesla has also begun building its second U.S. factory in Austin, Texas, showing moves to expand sales volume.

This content was produced with the assistance of AI translation services.