Cobalt prices are surging as demand booms on lofty electric-vehicle production goals from automakers like Tesla (TSLA), General Motors (GM) and Ford (F).
The price rise comes as automakers double down on their commitment to an all-electric future and set ambitious output targets for electric vehicles.
GM CEO Mary Barra announced Wednesday that her company will produce more Chevrolet Bolt EVs on the back of rising global demand. She also reaffirmed that the self-driving cars of the future will work best with battery-powered vehicles.
GM plans 20 new all-electric models by 2023. Ford plans 13 electric models over the next several years. Volkswagen, which has a target for more than three million EVs a year by 2025, has asked cobalt producers last year to submit proposals for supplying the critical battery material for 10 years.
Tesla's ambitions for the Model 3 are huge, but its production targets have become more conservative over time. Efforts to ramp up reportedly have been hamstrung in part by cobalt availability.
Now Tesla — like auto peers BMW and Volkswagen (VLKAY) as well as iPhone maker Apple (AAPL) — is racing to lock in cobalt supplies for their use in rechargeable batteries.
Shares of GM closed flat on the stock market today, Ford climbed 1.1%, Volkswagen dipped 0.2%, Fiat Chrysler (FCAU) lost 0.7%, and Tesla gave up 0.6%.
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As demand soars, the Democratic Republic of Congo could announce a new mining code Friday that would add new higher taxes and royalties for cobalt. More than 60% of the world's cobalt is found in that African nation.
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