Tesla is inching closer to reaching its production goals. CEO Elon Musk told shareholders at the company’s annual meeting it’s “quite likely” they will meet their 5,000 cars a week target for the Model 3. As the electric vehicle (EV) sector attempts to move from niche market status to mainstream acceptance, cobalt demand is surging since it’s the main component in these car batteries. For Tesla there have been several production issues around getting all of the parts needed for the cars. Could cobalt become the Achilles heel for Tesla’s Model 3 ambitions?
The Breakdown You Need to Know
Currently Tesla is making 3,500 Model 3 vehicles a week and Musk stated they’re on track to reach 5,000 a week by the end of June. CultureBanx notes this is a far cry from when the company officially missed its goal of making 2,500 Model 3 vehicles a week by the end of Q1. Tesla has blamed bottlenecks in the production of the Model 3’s batteries at its Gigafactory for the delays.
Some of these battery delays can be attributed to the high demand for Africa’s cobalt. Around 54% of the world’s cobalt supply comes from the Democratic Republic of Congo. A 2017 report from Morgan Stanley projected as many as 1 billion EVs could be on the road by 2050, which will put more pressure on the region’s precious metal.
Due to the anticipated flood in global sales of EVs, the demand for cobalt used in electric car batteries is expected to rise about eight times by 2026. Not to mention, production of cobalt in the U.S. is pretty low at just 650 metric tons in 2017, according to the U.S. Geological Survey. The Congo produced 64,000 metric tons of cobalt last year, making the picture clear on how important the region is for Tesla.
What makes cobalt so valuable to EV’s? This is where it gets a bit technical. The cathodes in lithium-ion batteries typically used in EVs are made of metal oxides that contain a combination of cobalt and other elements. Cobalt allows the cathodes to focus immense power in a confined space. Simply put, without the element’s energy density, batteries without cobalt tend to perform worse.
Tesla decided early in its Model 3 production, the first version it makes would come with the long range battery pack. Musk also said the smaller approximately 50 kWh battery pack will be ready by the end of this year.
As automakers push further into electric car production they will have to fend off tech companies like Apple and Samsung which are also vying for a larger share of the cobalt market. Apple is one of the largest consumers of cobalt and roughly a quarter of global production of the metal winds up in smartphones. Also, Tesla may need to strengthen its relationship with China. Right now the country controls 62% of the world’s cobalt supply.
Metal Mining Awareness
Amnesty International alleged in 2016 that Apple and Samsung’s Chinese suppliers were buying cobalt from mines that rely on child labor. Tesla has pledged to not take cobalt from child labor. However, it’s hard to track the metal’s origination once it has reached the end of the supply chain.