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Energy
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General Market Commentary
Topics:
General Energy
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General Market Commentary
BMW throws fuel on cobalt price fire: 'we'll need 10x as much'
Cobalt prices have gone ballistic in 2017 with the metal quoted on the LME touching $75,000 a tonne a week ago, a 127% surge year to date and a more than 20% jump just over the last month. Lithium carbonate prices began its run up two years ago, going from $6,100 per tonne to average above $20,000 a tonne in November this year.
On Friday luxury vehicle maker BMW said its needs for car-battery raw materials such as cobalt and lithium will grow 10-fold by 2025. Markus Duesmann, purchasing executive for the German marque, said the company is close to signing five and 10-year supply contracts.
BMW plans to offer 25 electrified vehicles by 2025, while VW is targeting a 300-model battery-powered lineup by 2030. “We’ve been intensively focusing on how to manage future cobalt supply for about a year now,” said Duesmann. “Before, it wasn’t clear just how quickly demand will accelerate.”
“By 2025, we’ll need up to 10 times as much of the battery raw materials than we do currently,” Duesmann said, noting that Munich-based BMW is set this year to sell a minimum 100,000 cars that are at least partly powered by the technology. “Today we are a leading manufacturer of electrified vehicles, so a 10-fold increase until 2025, for us, is enormous.”
Volkswagen will invest more than $40 billion in the next five years as part of a push into battery-powered vehicles and autonomous-driving systems. Daimler AG is spending 10 billion euros on 10 battery models by 2022. The boom in electric cars could more than quadruple demand for cobalt to in excess of 450,000 tons by 2030 from less than 100,000 tons last year, according to Bloomberg New Energy Finance.
“In the past three to four months, we’ve noticed that other manufacturers are seriously looking at cobalt supply,” said Duesmann. “It’s gotten more hectic and changed a lot over the past year, since so many more are looking for deals.”