If you've been following the electric vehicle market, you've probably heard a lot about
Cobalt, cobalt, the cobalt, cobalt, cobalt.
The reason cobolt's been getting so much attention is because it's one of the metals used to make lithium-ion
batteries, which power everything from laptops and cell phones to electric vehicles.
The amount of different metals found in an EV battery can vary depending on the battery type and car model,
but a typical lithium-ion battery pack may contain around 14 kilograms of cobalt.
Cobalt has been a popular choice for batteries because the metal increases battery life and energy density,
which in the case of EVs, means range, by keeping the battery structure stable as the
battery is continuously charged and discharged.
But cobalt, which is usually extracted as a byproduct of nickel and copper mining, is one of the most
expensive materials in a battery.
While battery prices have fallen 89 percent between 2010 and 2020, they
still make up about 30 percent of the total cost of an electric vehicle.
For a typical vehicle with a, say, an 80 kilowatt-hour battery, today we estimate that
cobalt content alone costs around $800 in that battery.
So that's not insignificant.
For mass electrification to happe, there are lots of sentiments that cobalt needs to be
eliminated or reduced to the bare minimum.
Cobalt extraction is also linked to human rights abuses and child labor.
These are some of the reasons why battery manufacturers like Samsung and Panasonic and carmakers like
Tesla and VW, along with a number of startups, are working to eliminate cobalt
completely. Elon Musk has been talking about removing cobalt from Tesla's batteries
since 2018. And some of the company's China-made vehicles are already using cobalt-free
technology. But although there are a number of different cobalt-free technologies being tested,
each has presented its own challenges.
Cobalt helps to prevent battery fires, so if you eliminate it, you have to
replace it with something else that maintains safety and longevity.
EV sales worldwide are expected to skyrocket from 3 million in 2020
to 66 million in 2040.
And with increased demand for EVs, demand for raw battery materials, like cobalt, is
expected to outstrip supply.
Comparing demand and supply for cobalt, there is, geologically speaking,
enough raw material in the earth's crust.
Same with lithium, same with nickel, same with manganese.
It's just that the production and the processing of that material, just like all the other materials,
is nowhere near the level of that it needs to be to sustain the level of demand.
One way to ease demand for new cobalt mining is by recycling the cobalt found in old batteries.
Companies like Redwood Materials in Nevada and Canada-based Li-Cycle have emerged to do
this. But some types of recycling have downfalls.
Currently, cobalt is recycled, but the process in which it is recycled is
very environmentally unfriendly.
You take all the old batteries and you smelt them at temperatures higher
than a thousand degrees C, and you can extract the cobalt back out of it.
The reason that that is done is because of how expensive cobalt is.
For the past four years, the average cost of cobalt was more than the cost of all the other battery metals put
together. The price of cobalt has also historically been very volatile.
Part of this volatility may be due to the fact that cobalt is usually produced as a byproduct of nickel and copper
mining and therefore tied to the demand and price fluctuations of those metals.
The mining and refining of cobalt is also geographically limited.
The majority of the world's battery-grade cobalt reserves are located
in the Democratic Republic of Congo, where the mining of cobalt is associated
with human rights abuses and child labor, and so on.
Chinese investors control about 70 percent of Congo's mining sector.
China also has over 80 percent control of the cobalt refining industry, where the raw
material is turned into commercial-grade cobalt metal suitable for use in EVs.
In light of the U.S. China trade war, cobalt supply is in a precarious position for U.S.
manufacturers.
The reason China has really dominated is they've actually quite embraced the
lithium-ion battery revolution.
To understand the importance of cobalt in batteries, we have to talk about battery chemistry.
A typical lithium-ion battery has three main components.
The negative end is known as the anode and the positive end the cathode.
The two electrodes are separated by the electrolyte, a substance that conducts an electric current.
The movement of positively charged lithium ions from the anode, through the electrolyte, and to the
cathode creates free electrons, which travel through an external circuit and
carry the electric current used to power a device.
When a battery is charged, this chemical reaction is reversed.
Different types of lithium-ion batteries are distinguished by the metals that make up the cathode.
This is where cobalt is found.
Today, the market is dominated by NMC batteries, whose cathode contain nickel, manganese and
cobalt. Depending on the proportions of each metal in the cathode, which are represented by the
numbers following the cathode names, you will get different properties in the battery.
For instance, increasing the nickel in the cathode boosts energy density, and therefore range, but
also makes batteries more unstable.
That's because adding more nickel usually means decreasing the amount of cobalt, which prevents cathode
corrosion that can lead to battery fires.
Battery and car manufacturers try to optimize battery chemistry on the parameters of costs, life cycle,
safety and range.
Some cobalt free batteries do already exist, but there are trade offs.
There is already a viable cobalt free battery and that is lithium iron phosphate, or LFP.
But the main downside of LFP is low energy density and therefore
driving range
Can see lithium iron phosphate right now in busses, so things that don't need to go
that far and they have a regular routine, but not as consumers, we want cars that can
compete on a one-to-one footing with the internal combustion engine, and those catalysts that
don't contain cobalt right now are not able to deliver that.
The production of lithium iron phosphate, or LFP batteries, is dominated by Chinese companies
like BYD and Contemporary Amperex Technology Limited or CATL.
One reason is an old licensing agreement that allowed Chinese manufacturers to make LFP batteries
without having to pay an expensive fee to the patent owners as long as they sold the batteries within China.
The last of these patents, which are owned by a Swiss-based consortium, expired in September of
2021 in Europe and are set to expire in 2022 in the U.S..
This has opened the floodgates for major Western automakers to use iron based battery chemistries.
American and European OEMs are adopting LFP in parallel to their
high-nickel batteries because it has great advantages over a high-nickel and
cobalt-based batteries.
Notably, it's a lot cheaper.
The component materials are a lot more readily available and abundant than nickel and
cobalt, and it has a longer longevity.
Lithium iron phosphate batteries are also generally considered very safe, since iron is a very
stable element. Ford and Volkswagen have both said that they would offer vehicles with LFP
batteries. Tesla already uses LFP batteries in the Model 3 and Model Y vehicles it
manufacturers in China, and the company says it will now expand use of LFP batteries to all of its
entry-level Model 3 and Model Y vehicles.
Previously, these cars used nickel cobalt aluminum oxide or NCA batteries, which
Tesla will continue to use in its long-range versions.
For our long-range vehicles, we use a nickel-based cathode and we use nickel because nickel is
higher energy density for our long-range vehicles.
But for our standard-range vehicles and for stationary storage, I think all of that will move to
iron cathodes. So moving to an iron-based chemistry, which is sort of finally at the
point where it's competitive on range when combined with an efficient powertrain,
I think that will be the vast majority of batteries in the future will be iron based.
Even Apple was reportedly in talks with Chinese manufacturers to make batteries for its planned EV
car project. Though those talks seem to have been put on hold.
In an effort to reduce U.S.
dependance on foreign countries, the U.S.
Department of Energy released a national blueprint in June to help guide investment to develop domestic
lithium battery manufacturing and support further R&D.
Among its goals, the blueprint calls for eliminating cobalt from lithium batteries by 2030.
Two U.S.-based startups, Sparkz and TexPower, say that they can help,
though the companies have yet to prove out their technologies in electric vehicles.
Sparkz was founded in 2019 by Sanjiv Malhotra, a former executive at the U.S.
Department of Energy. The Tennessee-based company has 15 employees and was born out of a
partnership with the Department of Energy's Oak Ridge National Laboratory.
Sparkz says it's raised over $10 million in grants from the DOE, the California Energy
Commission and several early customers to bring its cobalt-free lithium-ion battery to the
market.
That was one of the key motivation factors for starting Sparkz was to address the
supply chain issues for lithium-ion batteries, predominantly for cobalt,
and make us independent of any supply chain
that is dependent on China.
Sparkz is still in its testing phase.
The company says it's initially focusing on supplying batteries for large transportation vehicles like busses and
trucks, off-road vehicles like farming and factory equipment and energy storage
solutions. Sparkz says it's also in talks with two auto manufacturers and will begin
testing its batteries in their vehicles next year.
Sparkz's technology focuses on replacing the cobalt in its cathode, which also contains nickel and
aluminum, with iron.
The company says it's considered other metals but chose iron because it's cheap, widely available in the
U.S. and chemically stable, making it safe to use.
Malhotra says Sparkz's battery cathode material, which the company calls NFA, for nickel iron
aluminum, improves upon both iron-based cathode chemistries and those containing cobalt.
The energy density of the cell using our cobalt-free cathode is twice
that of the LFP.
And in terms of the cost, we're almost about 30 percent lower than that of
LFPs. Yet at the same time, this cobalt-free cathode meets and
exceeds the performance that you would see from a traditional
cobalt-carrying cathode, in terms of energy density, which is the energy that you can pack in
a certain weight or a certain volume.
It meets the life expectancy of our traditional lithium-ion battery, and
in terms of cost, it's almost about 35 to 40 percent lower than the
cost of your typical lithium-ion battery.
To create this NFA cathode material, Sparkz has licensed six patents from Oak Ridge National
Laboratory.
The primary focus of these six patents is (A) on the design of
the material that's used while eliminating cobalt and replacing it with iron.
Secondly, the process to make the cobalt-free cathode a lot more stable.
And the third is the manufacturing process.
So there is one patent that essentially reduces the time to manufacture
because the time to manufacture translates into cost.
Sparkz says its cobalt-free batteries can be produced using the same equipment used to make
conventional cobalt-containing batteries.
We're currently looking for about close to two million square foot, where we will be setting up the
manufacturing for these three parts of the value chain, the cathode material,
the electrode and the cells.
And essentially, we've identified a couple of scale up partners,
and through some strategic partnership, we are looking to have
manufacturing for these three components starting next year.
Like Sparkz, Housto- based TexPower was founded in 2019.
The startup was spun out of research headed up by Arumugam Manthiram at the
University of Texas at Austin.
In 2020, the research team published a paper in which they tested a cathode made of manganese,
aluminum and 89 percent nickel, and found that their cobalt-free material performed very well when
compared to cobalt-containing cathodes.
We do not see any downside with the performance of our material
without any cobalt compared to the performance of the material containing cobalt.
The cycle life, as well as how fast you can charge and discharge
and safety.
This cathode composition was the jump off point for the material that TexPower is trying to commercialize.
We're commercializing our nickel manganese aluminum based chemistry that's cobalt free,
higher energy density than current lithium-ion battery cathodes and operates stably and
safely.
Globally, the most widely used cathode material today is NMC 622.
This cathode is composed of 60 percent nickel and 20 percent each of manganese and cobalt.
TexPower says it's able to increase the energy density of its cathode material by replacing cobalt
with larger quantities of nickel.
But increasing nickel in the cathode has traditionally come with its own challenges.
Nickel is highly reactive with the electrolyte.
So cobalt is typically added to minimize the degradation of the cathode
structure and then other elements like manganese are added also to
improve the thermal stability.So all these other elements that are added are
typically added to make up for the deficiencies of nickel.
TexPower says that it's navigating this instability problem by adding aluminum and manganese, as well as a
number of proprietary substances, known as dopants, as stabilizing agents.
The result, the company says, is a cathode material that is 20 percent cheaper than the conventional NMC
622 cathodes. But producing this material is tricky.
Decreasing the cobalt in the material makes the production harder.
It will also be difficult to get consistent properties from batch to
batch. So the process TexPower is developing is to minimize that kind
of concern so that when you produce tons and tons of material,
you will have consistent properties from one batch to another batch.
Whereas cobalt is generally easy to synthesize into a cathode material, getting the right
reaction using nickel requires close monitoring and control over factors like
temperature and oxygen flow and pressure.
It took years for the team at UT Austin to fine tune the production process of their nickel manganese aluminum
cathode material. TexPower will use the same process to produce its cathode material at
scale.
Our production technique is immediately scalable.
It's the same production technique that they use industrially.
And so next year we're building a production line for hundreds of kilos of material per
year.
TaxPower makes just the cathode material and plans to partner with other companies to produce battery
cells.
We have a contract with the Department of Defense in conjunction with 24M, where they're
producing a high-energy cell with a lithium metal anode and our highest
energy cathode material, and we're reaching energy densities in excess of 500 watt hours per kilogram.
That's around double current commercial lithium-ion batteries.
Still, Erickson says that it may be a while before TexPower's cathode materials are used in
EVs, although it is in talks with a number of automakers.
The automakers have a year or several years of safety testing
and things like that that they'll go through before they'll put it into a commercial vehicle.
But as early as the end of 2023, we could have some prototypes
in electric vehicles.
Although cobalt-free battery performance continues to improve, experts believe that the future EV
battery market will consist of a number of different battery chemistries for different applications.
We calculate around 20 percent of the global battery electric vehicle market
by 2030 being taken up by these new cobalt-free chemistries.
We expect that the sort of entry-level, low-cost vehicles, for
example, the standard range Tesla Model 3, will be LFP or lithium iron
phosphate and then followed by these cobalt-free materials, which will
account for most of the mainstream volume vehicles.
And then at the top end of the range will be high-nickel batteries, which will
account for high-performance, high-range vehicles.
Other battery breakthroughs could help enhance cobalt-free chemistries.
Car companies Hyundai and Kia announced they're working with U.S.-based Factorial Energy
to replace liquid-electrolyte batteries with solid-state electrolyte batteries.
This would give batteries an even longer range and added safety benefits.
With these cobalt-free batteries, they operate at higher voltage, and that's one reason
why they are more susceptible to battery fires.
With solid state batteries, it's just like your solid-state hard drives.
It's a solid electrolyte.
It's able to withstand higher voltages.
It can potentially deliver higher driving range, which is what's the most
important thing for a consumer, but also higher safety and faster charging times.
We just have received another grant from the California Energy Commission for next
generation batteries, which is basically solid-state batteries using our cobalt free cathode,
which has the potential of doubling the energy density that we have today.
So basically making it almost four times that of LFP.
Meanwhile, others are focused on improving the battery's form.
Certain companies like, for example, BYD are attempting to offset the
range disadvantages of LFP with certain things like what we call
cell-to-pack technology, where we do away with splitting the battery pack into modules.
We just have the entire battery pack as a number of cells together, and that gives you a
better range advantage.
But whatever advancements we make, experts stress the technology needs to be widely
accessible.
When you think of cobalt-free cathode chemistries, what we are hoping to have
is batteries that are more accessible to all.
That makes it easier for developing countries to adopt a lot of the
technologies that we are trying to develop without fear for costs, without fear for performance.
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