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Tesla battery supplier Panasonic wants to phase out cobalt in its electric vehicle battery cells within two to three years, which would cut costs and increase the company’s ability to follow through on the automaker’s ambitious plans for global expansion.
Over the past few years, Tesla has really focused on producing electric vehicle batteries and sourcing materials for its cells in massive quantities. The automaker has also focused on battery longevity, which cobalt helps by ensuring the stability and life cycle of each battery. However, cobalt is an extremely controversial mineral. It is typically operated in the Republic of Congo, where child labor is used, and many companies have attempted to get rid of the cobalt in their cells altogether. Panasonic is one of those companies, Nikkei Asia reported.
Shawn Watanabe, head of energy technology and manufacturing at Panasonic in Japan, detailed his company’s plan to remove cobalt from its cells in a virtual session for the Consumer Electronics Show, which is the most the world’s largest consumer electronics and technology show on Wednesday. “In two or three years, we will be able to introduce a high energy density cell without cobalt,” he said.
Getting rid of the cobalt in the cells would not only reduce the cost of the cells, but the price of electric vehicles would also decrease. The battery of an electric vehicle is the most expensive part of the car and represents between 30 and 40% of the vehicle. Panasonic, which has partnered with Tesla since 2014 and recently signed a new battery supply agreement with the company headed by Elon Musk, helps operate the Tesla Gigafactory in Sparks, Nevada.
Ultimately, the cost of batteries is what really drives the price of electric vehicles up. Tesla has worked tirelessly to determine the supply constraints of EV cells and has started manufacturing its own 4680 cell in-house. The way to cut costs is to mass produce cells, which requires large materials contracts, and Tesla is focusing on nickel for the future, not cobalt.
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“I would just like to stress again that all mining companies, please mine more nickel,” Musk said during the company’s second quarter 2020 earnings call. “Tesla will give you a giant contract for a long time if you mine nickel in an efficient and environmentally friendly way.”
Panasonic is adopting the same strategy, according to Celin Mikolajczak, vice president of battery technology for Panasonic North America. “Reducing cobalt makes manufacturing more difficult for us, but ultimately it reduces the negative environmental impacts of batteries and lowers the cost.”
Panasonic is also trying to cut costs by recycling batteries and materials. He recently partnered with JB Straubel, a founder of Tesla who started Redwood Materials. “The materials we use are very valuable. We have always recycled. It’s a constant flow of raw materials, and it could become a valuable part of our supply chain, ”Mikolajczak said.
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