Elon Musk reckons ‘boring bonehead’ questions on Tesla’s massive cash burn rate are not cool.
He was equally sensitive on Tesla’s recent first-quarter investor call on the subject of cobalt, a key ingredient in lithium-ion batteries, which is today’s interest.
The cobalt price has increased almost four-fold in the past two years as the world frets about being reliant on the less-than-stable Democratic Republic of the Congo for as much as two-thirds of its needs to power the electric vehicle and renewable energy storage revolution.
Apart from the price rise – reflecting an overall supply deficit at present – there are concerns that DRC supplies are less than ethical, with allegations of child slave labour being involved being nightmarish stuff for big-brand end users of cobalt from that country.
So supply/cost pressures and ethical issues are at play in any discussion on cobalt.
But Musk did not bother with any of that at the briefing. He simply brushed it all aside with the comment that Tesla thinks it can get “the cobalt to almost nothing” in its particular preference for nickel-cobalt-aluminium batteries. He was exaggerating.
While there is no doubt that the trend to lower cobalt content in batteries is real, the metal’s key role of providing stability (no fires) is not going away any time soon. And as Canaccord Genuity pointed out, the trend of lower cobalt has been built in to what remain “very positive’’ demand models.
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