Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

COMMODITY CRUNCH: Will Tesla Buy a Cobalt Mine?

May 17, 2022 By Jeremy Jones, CFA

Elon Musk, founder of Space Exploration Technologies Corp.- SpaceX, joins President Donald J. Trump at a launch briefing in preparation for the launch of the SpaceX Falcon 9 rocket with the Crew Dragon vehicle Wednesday, May 27, 2020, at the Kennedy Space Center in Cape Canaveral, Fla. (Official White House Photo by Shealah Craighead)

The world’s cobalt supplies are stretched thin as demand from electric vehicle automakers has surpassed that of smartphone producers for the first time. When asked about the crunch in cobalt supply, Elon Musk responded that Tesla may have to purchase a cobalt mine to secure its own supplies. The Financial Times’ Neil Hume reports:

Electric vehicles overtook smartphones and personal computers for the first time last year as the main source of demand for cobalt, a rare metal used in lithium-ion batteries.

The automotive industry consumed 59,000 tonnes of cobalt in 2021, or 34 per cent of total demand, as sales of electric and hybrid vehicles doubled, according to a report by the Cobalt Institute.

That outstripped the 26,000 tonnes of metal used in mobile phone manufacturing and 16,000 tonnes in laptops and tablets. Total demand for cobalt was 175,000 tonnes against mined supply of 160,000 tonnes.

The mismatch in those figures highlights one of the biggest challenges facing the automotive industry as it goes electric: securing enough raw material. As more electric vehicles are rolled out, concerns are mounting about potential supply crunches for crucial battery metals from cobalt to lithium and nickel. Demand from the car industry is expected to account for half of the cobalt demand by 2026.

Cobalt is seen as particularly problematic because it is a byproduct of mining copper and nickel, and supply is very concentrated by geography and company.

Almost three-quarters of the world’s mined cobalt supply comes from the Democratic Republic of Congo, where production is dominated by Chinese companies and London-listed Glencore. The Cobalt Institute report shows that the central African country produced 118,000 tonnes of cobalt in 2021 — significantly more than the next largest supplier, Australia, at just 5,600 tonnes.

That has fuelled speculation about whether a big carmaker might acquire a miner. Tesla’s chief executive Elon Musk told an industry conference last week that he was open to the idea.

“It’s not out of the question,” he said at the FT Future of the Car Summit. “We will address whatever limitations are on accelerating the world’s transition to sustainable energy. It’s not that we wish to buy mining companies, but if that’s the only way to accelerate the transition, then we will do that.” Tesla has a goal of producing 20mn electric vehicles annually, up from 1mn last year.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Tesla Now the World’s Largest Automaker
  • Chinese Taking Aim at Tesla
  • Can China Curb Commodity Costs?
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. CNBC has ranked Richard C. Young & Co., Ltd. as one of the Top 100 Financial Advisors in the nation (2019-2022) Disclosure. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Money Market Assets Hit Record High: $5.4 Trillion - May 26, 2023
  • The Mania in AI Stocks Has Arrived - May 25, 2023
  • The Wisdom of Sam Zell - May 24, 2023

Search Young Research

Most Popular

  • Your Survival Guy Felt Like a U.N. Worker in Rome
  • The Mania in AI Stocks Has Arrived
  • Money Market Assets Hit Record High: $5.4 Trillion
  • Your Survival Guy in Rome 30-Years A.B. (After Babson)
  • The Future of the American City is This…
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • A Three-Week International Research Trip to Paris via Rome
  • Is an Investment Property Disaster Looming?
  • The Power of a Compound Interest Table
  • Letter to the Federal Reserve Chairman from Your Survival Guy

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

The Importance of a Balanced Portfolio

Invest with Peace of Mind and Comfort

What Kind of Life Are You Investing For?

RSS The Latest at Richardcyoung.com

  • Rewarding Loyalty with Ridicule
  • Rome, Paris, U.S.A.: Global Crisis in Confidence
  • June Is Retirement Compounders Month
  • Americans Scared of CBDC Control of Their Money
  • Your Survival Guy’s Best Insider’s Guide to Rome
  • Auto Profitability Colliding with Low Emissions
  • Birth Rates in France Worst Since Post-WWII Era
  • What Binds the Woke Left Together?
  • Joel Salatin and Alfie Oakes, America’s Food Kings
  • The Party Is Going Off the Rails

RSS The Latest at Yoursurvivalguy.com

  • Rome, Paris, U.S.A.: Global Crisis in Confidence
  • Your Survival Guy’s Best Insider’s Guide to Rome
  • What Is a Fiduciary Duty? Are You Working with a Fiduciary?
  • Survive and Thrive June 2023: Your Survival Guy in Rome 30-Years A.B. (After Babson)
  • Birth Rates in France Worst Since Post-WWII Era
  • Your Survival Guy Felt Like a U.N. Worker in Rome
  • Social Security: Declining Italy Needs a Bambino Boom
  • ATTACK ON THE IVAN KHURS: Unmanned Vessels Changing Naval Warfare
  • The Future of the American City is This…
  • Happy Memorial Day: Your Survival Guy: Proud To Be an American

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.