Cobalt demand and electric car production

Chilean Cobalt Corp. a company that mines and develops cobalt and copper properties in Chile, highlighted the demand for cobalt in electric car production.

For starters, the International Energy Agency (IEA) has projected unit volumes of electric vehicles (EVs) produced per year under discrete scenarios for various vehicle types.

The IEA projects a fleet of 200 million EVs by 2030, according to its most conservative scenario and not necessarily geared to achieving global climate targets, and excludes the two- and three-wheeler segments.

Sales of light passenger EVs dominate this estimate, with more than 85% of the total volume.

These EV sales require a corresponding volume of battery or fuel cell production to accommodate EV production.

If governments and other stakeholders were to incentivize the achievement of net-zero emissions targets by 2050, the total EV fleet is projected to increase by around 75% to over 350 million vehicles.

The IEA indicates that there is a 15% reduction in cobalt demand equivalent to approximately 35 kilo-tonnes per year between its 2030 baseline versus constrained methodologies.

It follows that they project over 233 kilo-tonnes per year in the base case and 198 kilo-tonnes per year in the constrained case.

Cobalt demand

To put this in perspective, Statista indicates that 170,000 kilo-tonnes of cobalt were produced in 2021.

Therefore, for light-duty vehicles alone, at least 16% more cobalt production is expected to be needed in 2030 than today.

Add to this the uses of cobalt for battery applications outside of light-duty vehicles and materials and other technology applications outside of the electric vehicle spectrum, and it will be absolutely necessary to expand cobalt supply to meet demand.

Given global environmental and climate considerations, there will be an even greater demand for responsibly sourced cobalt, given that more than 70% of current production comes from the Democratic Republic of Congo (DRC).

Demand for copper is also expected to increase, although not as much as for cobalt, as copper sources are not as limited.