I’m going to geek out here. Let’s talk battery chemistry. Automakers and battery suppliers are in an R&D race to come up with the next low-cost battery. The one move that is increasingly seen as the quickest way to reduce battery costs is by reducing — or replacing — the cobalt content in a battery. The alternative to that might be manganese.
Here’s why. The average 84 kilowatt-hour battery — the size of the pack in a Tesla Model 3 or Volkswagen ID.4 — costs about $11,000 a car. There’s nothing in an internal combustion engine that costs that much. Even without the engine, fuel and exhaust systems, EVs are at a steep disadvantage in terms of cost. Hence the race to lower the price of batteries.
The batteries are made with a handful of key metals: cobalt, nickel, lithium, manganese, aluminum and iron. Cobalt is one of the most expensive, at $45,000 per metric ton. Most EV batteries today are 20% cobalt. That means the element represents about $850 per vehicle in that 84 kWh battery in the ID.4, according to LMC Automotive analyst Sam Adham. That’s real money.
When General Motors announced its Ultium battery pack a year ago, the company bragged it would cost less than $100 per kWh, because it would use a lot less cobalt. That’s still too high — to get to cost parity with a combustion engine vehicle, BloombergNEF thinks it has to get to less than $80 per kWh. In a battery with 20% cobalt, the metal is about $10 per kWh.
That’s why VW, Tesla and China’s SVOLT are looking at batteries that replace cobalt with manganese, which costs less than $2,000 per metric ton. Not only is it cheaper, the price doesn’t fluctuate as much as cobalt. From 2011 to 2016, cobalt hung in the $30,000/ton range. Then it spiked starting in 2016 and soared as high as $115,000 per metric ton in April 2018. It has since come down, but recently spiked over $65,000 before settling in at $45,000, according to data from BNEF. Carmakers can’t live with that kind of price fluctuation. Manganese prices, by comparison, have mostly remained stable for a decade.
Manganese isn’t the perfect element — there are lots of questions about its use in batteries: can it maintain the same power density? And what about the loss of cobalt’s stabilizing presence — the element prevents thermal runaway, or fires. “Researchers are confident that those hurdles can be overcome,” says LMC’s Adham.
Something is wrong with the maths here.
The battery costs $11000, 20% of the battery is cobalt, the cobalt in the battery costs $850?
$11000 * 20/100 = $2200 ≠ $850