Electric Vehicle Cobalt Demand Surpasses Mobile Phones... Concerns Over Worsening Supply Imbalance

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] As the electric vehicle market rapidly grows, an analysis revealed that last year, the amount of cobalt used in electric vehicle production exceeded the amount used in mobile phones for the first time. With the increasing demand for cobalt in the electric vehicle industry, it is expected that the cobalt supply shortage will worsen in the future.

According to major foreign media on the 17th (local time), the Cobalt Institute in Guildford, UK, analyzed that the automotive industry consumed 59,000 tons of cobalt last year, accounting for 34% of total cobalt consumption. The amount of cobalt used in mobile phone production was recorded at 26,000 tons. Cobalt consumed in laptops and tablets was 16,000 tons. Last year, total cobalt demand was 175,000 tons, while supply was only 160,000 tons.

Foreign media analyzed that the electric vehicle industry is expected to compete more fiercely to secure cobalt.

Elon Musk, CEO of Tesla Motors, said at a conference last week that they are considering securing cobalt mines. Musk stated, "We will address any issues that hinder accelerating the transition to sustainable energy," adding, "While we do not want to acquire mining companies, if it is the only way to accelerate the transition to green energy, we will acquire mining companies."

Tesla produced 1 million electric vehicles last year and plans to increase annual production to 20 million units in the future.

Cobalt is considered a particularly difficult mineral to secure because it is a byproduct of copper and nickel, and production is concentrated in specific countries and companies.

The Democratic Republic of Congo produces 75% of the world's cobalt supply. Last year, the Democratic Republic of Congo produced 118,000 tons of cobalt. Australia, the world's second-largest producer, produced only 5,600 tons. Chinese companies and Glencore dominate cobalt production in the Democratic Republic of Congo.

With supply still unable to meet demand, the proportion of cobalt demand from the automotive industry is expected to rise to 50% by 2026.

The Cobalt Institute forecasts that cobalt demand will increase to 320,000 tons in five years due to the rise in electric vehicle production. The institute expects the supply-demand situation to improve somewhat until next year but predicts the imbalance will worsen again after 2024. It anticipates that the annual growth rate of cobalt supply from 2024 to 2026 will be only 8%, while demand growth will reach 12%.

Due to the supply-demand imbalance, cobalt prices doubled last year from $16 to $32 per pound. Prices have risen further this year and are currently trading around $37 per pound.

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