Hybrid cars and cobalt

Improvements in hybrid-electric vehicle technology are expected to boost demand for cobalt-based batteries. This newly emerging demand, combined with increases in cobalt use for other types of rechargeable batteries, turbine engines and gas-to-liquid catalysts, will almost certainly elevate cobalt consumption to unprecedented levels.

The switch to hybrids is not just a U.S. phenomenon. Much of the rest of the industrial world is planning similar development of hybrid vehicles; indeed, several countries are ahead of the U.S. in hybrid development.

The hybrid system is seen as the bridge to the next generation of automotive propulsion: the fuel cell. The cobalt-bearing battery pack in the hybrid is identical to the fuel-cell battery, as is much of the rest of the electrical circuitry system.

In addition to higher fuel costs, several factors are stimulating the hybrid vehicle market. These include: concerns about the projected “oil gap” related to the depletion of inexpensive fuels, relentlessly increasing dependence on the OPEC oil supply, pollution in the world’s large cities, and concern about greenhouse gas emissions. However, the most important reason for the dramatic new interest in the hybrid car is the advanced technology used in hybrid engine design. This new technology represents a major leap in efficiency and performance of the propulsion system despite the apparent complexities of using both an electric and an internal combustion engine.

More than 700 million light vehicles are in use worldwide, and this number is expected to increase to between 2 billion and 3.5 billion by 2050. The number by 2025 alone is estimated to be 1.25 billion. Moreover, by 2050, the number of light vehicles produced annually is expected to grow to 100 million, compared with the current 50 million.

In addition, the vehicle-miles driven per year will increased to 16,600 by 2050, compared with about 11,800 in 1998. Most of this growth is expected to occur in China, which now produces about 3.8 million light vehicles per year, or nearly the number produced in Germany. Projected vehicle use in China is expected to grow exponentially at least in the next 10-15 years.

Shift to hybrids

Most studies indicate a need to shift from our current, petroleum-based transportation system to other, less-expensive and less-polluting energy sources. In an effort to replace or minimize the use of oil, countries such as the U.S., China and Japan are turning to improved technologies and potential alternative energy sources to propel light vehicles. The current favoured system is the hybrid gas-electric vehicle.

Short- to medium-term needs can be met with HEVs, and longer-term goals will likely include fuel-cell-powered vehicles (FCV). Both vehicle types use rechargeable “high-power” batteries. The hybrid-electric vehicle is an avenue that allows for the transition from the internal combustion engine to an alternative electric-based power system, while improving transport efficiencies. The battery is used to store energy to power the electric motor, and to store energy derived from the regenerative braking system. This is a significant improvement in hybrid vehicle technology.

The average fuel efficiency in the U.S. is 24 miles per gallon. This rate has decreased by 2 miles per gallon since 1998, owing to an increase in the use of pickups and sport utility vehicles. The new hybrid systems are improving fuel economies by 10% to 120%, depending on whether the system is “mild” or “full” hybrid. China recently announced its commitment to a full-hybrid, gas-electric vehicle fleet to reduce foreign oil imports and decrease its increasing dependence on oil derived from volatile Middle-Eastern countries.

However, it is only recently that the real promise of the HEV has started to be recognized in the popular press. In January 2004, Motor Trend magazine named the gas-electric Toyota Prius “car of the year” for delivering an astonishing 60 miles per gallon in city driving.

This year Toyota will sell 150,000 gas-electric hybrid cars around the world. Clearly, Toyota and, to a lesser degree, Honda are leading the way in the shift to hybrid. Most major auto manufacturers plan to bring hybrids to market in the next five years, but these companies are badly trailing Toyota. However, Ford just signed a licensing agreement to use Toyota’s hybrid technology, and General Motors and Daimler-Chrysler are having similar discussions.

Toyota is welcoming the mass marketing of its hybrid technology. The auto-maker plans to sell at least 300,000 hybrids annually between now and 2006, and last year GM announced it would develop the manufacturing capability to build as many as 1 million hybrids in 2007. The potential demand is such that the hybrid vehicle penetration could be 10-15% of the new vehicle market by 2014. The popularity of the new Prius and Civic hybrid cars would suggest the potential for an even larger demand, particularly as new, more “prestigious” Toyota Lexus and Honda Accords enter the marketplace later in 2004 and early next year, respectively.

Cobalt batteries

The standard hybrid battery today is the nickel-cobalt metal hydride (Ni-MH), but the preferred hybrid vehicle battery is the lithium-cobalt-ion or polymer (Li-ion), owing to the latter’s lightweight and exemplary performance. All major hybrid vehicle battery systems use cobalt in relative proportions.

In general, the greater the amount of cobalt contained in a battery, the greater the battery’s performance. The nickel-cobalt metal hydride battery in the full hybrid Toyota Prius hosts 1.31 kWh of power and contains 7 lbs. of cobalt. This new battery has a higher power density than conventional nickel hydride batteries. The new, more powerful Toyota hybrid system is rated at 60 miles per gallon in the city and 51 miles per gallon in the highway, which is 15% more efficient than the earlier Prius. The car accelerates from 0 to 60 miles per hour in 9.8 seconds with the 143-h.p. gas-electric system. The vehicle is equipped with the regenerative braking system, which partially recharges the battery.

Some concern has been raised about the current high price of cobalt and the effect that this price might have on hybrid batteries. However, the impact in the case of the new Toyota Prius does not appear significant. If the more efficient lithium-ion or polymer battery were used, the cobalt cost would be about 2.2 times higher, owing to the greater cobalt content of these batteries.

The full-hybrid Prius achieves more than twice (2.1 times) the fuel efficiency of conventional vehicles of comparable size and performance. The other, “mild” hybrids obtain 1.2-1.5 times the reported fuel efficiency of comparable vehicles.

The cost of a hybrid Prius or Civic compared with a comparable vehicle continues to decrease with the mass production of units, the lower cost of battery packs, power electronics, and regenerative braking and motor technology. Toyota claims the price of a Prius is about US$1,000 or about 5% more than a Toyota Camry. In contrast, the early Prius costs about 30% more than a conventional car. As the number of hybrid units increases, the price will likely continue to fall.

If the lithium-cobalt ion battery were used in the Prius, the cost would be about US$1,040 per vehicle. The main cost of the battery is related to manufacturing, not raw materials. Of the raw materials, cobalt is the most expensive commodity. At US$24 per lb. cobalt (US$26.40 kg), this commodity makes up almost 20% of the battery’s cost. Converted to lithium-cobalt oxide, the cathode costs about US$360 per vehicle (assuming 13 lbs. of Li-Co oxide per vehicle). The added cost of the hybrid-electric systems is about 20% greater than the cost of the pure internal combustion engine.

Because of the perceived limited supply and price volatility of cobalt, and the greater abundance of nickel, the nickel-cobalt metal hydride battery is now the preferred hybrid vehicle battery on the market.

Unusually high current prices for nickel and cobalt are placing added pressure on battery developers to subst
itute poorer performing cathode metals in rechargeable batteries. However, this substitution exacts a substantial penalty in battery performance. Many of these recently tested battery types have severe limitations in full hybrid gas-electric vehicles (lead-acid, zinc-air, indium and manganese, for example).

Limitations relate to battery rechargeability, excess weight, power availability, cost of production, emissions, and so on. A new alternative to lithium ion battery contains nickel, manganese and cobalt. This battery uses 66% less cobalt than a conventional lithium-cobalt ion battery, and purportedly retains much of the lithium-cobalt battery’s high quality. Ultimately, a wide range of batteries will likely be available for hybrid vehicles, depending on the performance and dependability requested.

Hybrids and cobalt demand

Although hybrid vehicles represent only a small percentage of today’s vehicle market, the future looks bright. GM is committed to building its capacity to produce 1 million new hybrid vehicles by 2007. Both Toyota and Honda expect their full fleets to be hybrid within the next decade, and that alone would amount to 10 million vehicles requiring 35,500 tonnes cobalt in batteries.

The current vehicle market totals about 50 million new units per year. With just a 3% market penetration by 2007, total hybrid vehicle production would exceed 1.5 million vehicles, requiring annual consumption of about 5,300 tonnes of cobalt in Ni-MH batteries — double the amount for lithium ion batteries. Hybrid vehicle market penetration is projected to increase to 10-15% of the vehicle market by 2014.

If we consider the U.S. Department of Transportation’s goal of full HEV market penetration by 2030 and the projected doubling of vehicles by 2050 units, to 100 million units, cobalt demand for Ni-MH batteries in vehicles alone could total 283,000 tonnes — more than six times the current annual world cobalt consumption. Many new cobalt producers would be needed to meet this huge potential demand — large primary producers, not today’s byproduct producers. As far as we know, the only potential major primary producer capable of providing even a significant portion of this quantity if U.S.-based Geovic, which has operations in Cameroon.

However, we prefer to adopt a conservative view. In our projection, we assume only a 50% HEV market penetration of an expected annual fleet of 80 million cars in 2030. We expect these HEVs to require on average 8 lbs. of cobalt per vehicle from a mix of various batteries. Applying these more-conservative assumptions for hybrid vehicle market penetration, we predict cobalt use will grow from about 43,000 tonnes in 2003 to nearly 130,000 tonnes in 2020 and 230,000 tonnes in 2030. The hybrid vehicle battery component of this potential consumption would be about 55,000 tonnes in 2020 and 135,000 tonnes in 2030. Clearly, this cobalt demand forecast is vastly different from those of most industry experts, who either grossly underestimate the future of HEVs or choose not to consider it at all.

— The preceding is edited version of an article published in Cobalt News, a quarterly publication of the Surrey, U.K.-based Cobalt Development Institute.