Five-Year Demand of Panasonic for Cobalt Triple

Kenji Tamura, leader of Panasonic's automotive battery business, said recently that “we have significantly reduced the amount of cobalt used, and hope to achieve cobalt-free batteries in the near future. Development is currently underway.” But in fact, the goal of cobalt free still has a long way to go.

 The insiders predict that Panasonic’s demand for cobalt in the next five years will triple.

The reason why Panasonic wants to develop cobalt-free batteries for automobiles is probably that the price of cobalt has soared in recent years, from $10/pound in December 2015 to nearly $40/pound today. On the one hand, domestic new energy vehicles will accelerate progress, and the ternary batteries have become the trend of the times. The demand will possibly have an explosive growth. On the other hand, due to liabilities action of Gecamines and freezing order event of Dan Gertler, the probability of resuming production of Glencore's KCC may fail to meet expectations. The risk of Congo's high uncertainty politics is bound to hinder the cobalt mines investment. The future amount of cobalt metal may be greatly limited.

Yoshio, head of Panasonic's automotive business, said that in addition to trying to reduce the rare metal content of the battery, Panasonic also tried to sign a contract with customers, hoping to avoid the risk of material price increases. Panasonic is the exclusive battery supplier for Tesla Model 3, which produces battery cells in conjunction with Tesla in the Giga factory in Nevada.

However, Rome was not built in a day. The development of cobalt-free batteries may take years. Due to concerns about cobalt shortages, many battery manufacturers changed the material formulation of the battery cathode. The nickel/cobalt/manganese ratio is changed from 6:2:2 to 8:1:1. However, the ratio has not yet been fully realized in mass production. As for the time-to-market of cobalt-free batteries, I am afraid it will be even longer.

During this period, the demand for cobalt has been increasing. In 2017, the demand for cobalt has already reached 118,000 tons. Roskill predicts that the demand for cobalt will reach 310,000 tons by 2027. More than 240,000 tons of cobalt will be used for car batteries, laptop batteries and mobile phone batteries. People in the cobalt industry said that Panasonic has been trying to ensure its stable supply in the cobalt market, and it is expected that Panasonic will consume 10,000 tons of cobalt next year. And then the consumption of cobalt will be up to 25,000 tons per year.

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