David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

All batteries are not created equal.

The 53 kilowatt-hour pack on a 2008 Tesla Inc. Roadster contains an estimated 38 kilograms of cobalt, a key element that some analysts fear may be running out. The same-sized battery on a 2017 Tesla would have about one-eighth of that, or 4.8 kilograms.

That's the best reason to be wary of predictions that cobalt is heading toward permanently higher prices north of $100,000 a metric ton. The complex chemistry on which rechargeable batteries depends offers myriad opportunities to economize on any material that gets too costly.

Cobalt is a crucial ingredient for manufacturing most lithium-ion cathodes -- the "positive" ends of the cell, equivalent to the nipple atop a conventional AAA battery.  Demand for such cathodes is set to soar as the world's vehicle fleet shifts from petroleum to electrical drive-trains, and as utilities build farms of rechargeable batteries to stabilize renewables-intensive power grids.

Boom and Bust
Cobalt prices tend to be marked by sudden jumps and prolonged slumps
Source: Metal Bulletin

As a result, cobalt prices have been soaring. Over the course of 2016, Metal Bulletin's quoted price jumped almost 50 percent from $10.30 a pound to $14.70/lb. Since then, it's more than doubled to $29.85/lb, or $65,808 a ton.

Part of this is due to cobalt's risky supply situation. Half of global production comes from the Democratic Republic of Congo, which despite its name has never held a fully credible election and where a civil war has driven almost a million people from their homes over the past year. Of that, an amount equivalent to perhaps 10 percent of global output comes from low-tech artisanal mines where child labor is common. Most of the non-Congolese half of global production has traditionally come as a by-product of nickel mining, which has struggled in recent years because of weak prices that have left many of the largest pits operating at a loss.

River of Metal
The Democratic Republic of Congo has grown to make up more than half of mined cobalt supply in recent years
Source: U.S. Geological Survey

The other price driver comes from demand -- and that's where the chemistry comes in. The cocktails of elements used to make lithium-ion batteries aren't all that less diverse than the cars they power, and recipes can call for wildly differing proportions of ingredients.

One reason cobalt has been soaring, according to Bloomberg New Energy Finance's Logan Goldie-Scot and Julia Attwood, is new regulations from China. These have been pushing manufacturers away from the locally popular lithium-iron-phosphate (LFP) cathodes -- which use no cobalt -- and toward nickel-manganese-cobalt (NMC) ones, which typically use about 12.3kg for a 53kWh battery.

There are other varieties of NMC out there, though. The market share of the cobalt-intensive NMC111 chemistry that has been most favored in recent years for electric vehicles has probably peaked, according to BNEF. NMC622 and NMC811, which BNEF predict will become increasingly popular up to 2030, use about a half to a quarter as much cobalt. They also use significantly more nickel than NMC111 -- a situation that could have an indirect effect on the supply side, too, given how much of potential cobalt supply comes from mining nickel ores.

Cocktail Shaker
The mixtures of elements used in different rechargeable battery chemistries vary widely
Source: Bloomberg New Energy Finance
Note: "Other" is aluminum (NCA) and iron (LFP).

As we saw in Thursday's column, small tweaks in battery chemistry and power-pack size can have a dramatic effect on global demand when rolled out over a worldwide fleet of half a billion cars or so. That picture becomes even more complex when you consider the different power-to-weight requirements of other sources of cathode demand, such as utility-scale storage, trucks, or even, one day, ships and aircraft.

All That Glitters
Platinum sometimes costs more than five times as much as palladium, but right now they're near parity
Source: Bloomberg

There are rare occasions when new sources of demand reset the value of materials on a longer-term basis. That's the situation we saw with palladium, mentioned in the first column in this series: From costing a quarter of platinum in the 1960s, at present it often trades close to parity. If one battery material manages to follow that path over the coming decade, it's probably cobalt -- but even then, the multiplying uncertainties around supply and demand mean that making firm predictions of looming shortages is a fool's game.

As Saudi Arabia's former oil minister Sheikh Yamani once said, the stone age didn't end because the world ran out of stones, but because better technologies came along. Most predictions of permanently higher values for niche commodities depend on the odds that humanity's talent for innovation fails to find anything better, even in the face of pricing pressures. Since the first copper artifacts were smelted seven millennia ago, that's tended to be a losing bet.

Part of a three-part series on battery materials. Part one was on platinum and graphite, and part two was on lithium.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. That polarity is reversed when charging so that the cathode becomes the negative end, but to save confusion we'll just focus on the chemistry when discharging.

  2. A Carter Center report into the 2006 Presidential election only found that the overall result was credible because abuses of process were conducted by both sides in the runoff poll. The 2011 election wasn't credible, according to a Carter Center report after that ballot.

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David Fickling in Sydney at

To contact the editor responsible for this story:
Katrina Nicholas at