Tesla, like other electric vehicle manufacturers, relies on lithium-ion batteries to power their cars. These batteries require cobalt as a key ingredient. Cobalt has become an essential material for lithium-ion batteries due to its ability to extend the life and stability of batteries while allowing them to operate in high temperatures. However, cobalt mining has been associated with ethical concerns regarding child labor and environmental damage. This has led to increased scrutiny regarding electric vehicle companies’ cobalt sourcing practices. As the leading manufacturer of electric vehicles, Tesla’s cobalt procurement strategies are of particular interest.
Why do lithium-ion batteries need cobalt?
Lithium-ion batteries consist of two electrodes – a positive cathode and a negative anode – with an electrolyte in between. The cathode is typically composed of lithium cobalt oxide (LiCoO2) or nickel-manganese-cobalt (NMC). Cobalt is a key component of these cathode materials for several reasons:
- High energy density – Cobalt provides higher energy density compared to other transition metals, allowing more energy storage per battery.
- Thermal stability – Cobalt improves lithium-ion battery safety and longevity by stabilizing structure of cathode at high temperatures.
- Capacity retention – Cobalt prevents cathodes from quickly wearing out, enabling batteries to withstand hundreds of charge/discharge cycles.
While battery chemistries are evolving, cobalt remains a staple ingredient that enables lithium-ion batteries to power electric vehicles efficiently and safely. Removing cobalt from cathode materials results in reduced performance.
Where does most cobalt come from?
The Democratic Republic of Congo (DRC) dominates global cobalt production, accounting for over 70% of mined cobalt supply worldwide. Political instability and unregulated small-scale artisanal mining in the DRC has raised ethical concerns regarding hazardous working conditions, child labor, and human rights abuses around cobalt mining in this region.
Other major cobalt producing countries include:
- Russia
- Australia
- Philippines
- Cuba
- Canada
However, the DRC has the world’s largest cobalt reserves and remains the epicenter of cobalt mining activity. Efforts by mining companies and regulators to improve mining conditions in the DRC have had limited success so far.
How does Tesla source its cobalt?
As the world’s largest electric vehicle manufacturer, Tesla requires substantial amounts of cobalt – over 7,000 tons in 2021 alone. In response to rising demand and ethical concerns over cobalt, Tesla has aimed to reduce its reliance on DRC cobalt and pioneer new battery chemistries requiring less cobalt.
Tesla’s cobalt sourcing strategy includes:
- Supply contracts with mining companies: Tesla has contracted major mining firms like Glencore and Vale to supply cobalt from operations in Canada and New Caledonia. This diversifies supply chains beyond the DRC.
- Recycled cobalt: Tesla has recycling initiatives to recover cobalt from battery manufacturing scrap and end-of-life vehicles. Recycled cobalt reduces reliance on newly mined supplies.
- Advanced batteries with less cobalt: Through acquisitions and R&D, Tesla is developing cobalt-free battery chemistries like lithium iron phosphate (LFP).
However, Tesla still sources some cobalt from the DRC through its battery supply chain partners like Panasonic and CATL. It’s estimated that around 20% of Tesla’s cobalt originated from the DRC in 2021.
Tesla’s Major Cobalt Supply Partners
| Partner | Details |
|---|---|
| Glencore | Major mining company supplying Tesla with cobalt from the DRC and other countries under a multi-year deal. |
| Vale | Second largest mining firm contracting with Tesla to provide cobalt mined in Canada and New Caledonia. |
| Umicore | Belgium-based materials company recycling cobalt and supplying Tesla with cobalt from end-of-life EV batteries. |
| Panasonic | Produces lithium-ion battery cells for Tesla using cobalt materials from various suppliers. |
How does Tesla’s cobalt sourcing compare to other automakers?
Tesla is generally considered a leader in responsible cobalt sourcing practices compared to other automakers. Steps it has taken include:
- Public reporting on cobalt supply chain risks through annual Impact Reports.
- Direct contracts with mining companies like Glencore and Vale to increase transparency.
- Significant investments into recycling programs and cobalt-free battery R&D.
- Joining initiatives like the Responsible Minerals Initiative to audit smelters/refiners.
Other automakers are catching up to Tesla’s standards, albeit slowly. For example:
- VW and Renault now contract directly with mining firms like Glencore.
- BMW uses blockchain solutions to track cobalt supplies from the DRC.
- Ford mandates third-party ethical audits of its cobalt supply chain.
But Tesla remains ahead of the pack regarding traceability efforts, supply chain transparency, and reducing cobalt reliance long-term via battery innovation.
What more can Tesla do to ensure responsible cobalt sourcing?
While Tesla has made strides, experts recommend additional measures it can take:
- More supply chain transparency: Provide details on each supplier’s responsible sourcing practices, including ethical mining audits.
- Greater traceability: Implement blockchain or GPS tracking to pinpoint cobalt origins from mine to cell-manufacturer.
- Responsible mining investment: Fund initiatives that improve artisanal mining safety in the DRC, instead of avoiding the region.
- Child labor monitoring: Join groups like the Global Battery Alliance that conduct on-site inspections for child labor in cobalt supply regions.
- Battery recycling: Expand reclamation partnerships to recycle more end-of-life batteries and reduce virgin cobalt demands.
Tesla states it’s committed to 100% transparency and ethical sourcing as it continues to grow. But full supply chain traceability from mine to finished battery remains challenging.
Conclusion
In summary, Tesla currently sources cobalt from a diversity of suppliers, including major mining companies like Glencore and Vale. However, around 20% of its cobalt still originates from artisanal mines in the DRC where child labor and environmental concerns exist. While Tesla is an industry leader in responsible cobalt sourcing, experts say more supply chain transparency, traceability efforts, ethical mining investment, and recycling initiatives could further improve social and environmental stewardship. As Tesla rapidly scales production, its ability to secure conflict-free cobalt while reducing overall cobalt needs will face continued scrutiny.