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EV Metal Index jumps 85% in a month despite nickel, cobalt price drop

Cheap and cheerful Wuling Hong Guang Mini EV Macaron. Image: General Motors

MINING.COM’s EV Metal Index set a new record in March with a surge in overall deployment more than offsetting a pullback in the price of cobalt and nickel used in the battery supply chain. 

The EV Metal Index, which tracks the value of battery metals in newly registered passenger EVs (including hybrids) around the world, climbed to $554 million during the month, an increase of 84.7% over February, and bringing the first quarter total to $1.14 billion. 

The Q1 2021 haul is 178% up on Q1 2020 and is also higher than total business done during all of 2017 — when average lithium and cobalt prices were substantially higher than today.

Total battery capacity of EVs sold during the month increased 139% year on year to over 22 GWh, according to Adamas Intelligence, which tracks demand for EV batteries by chemistry, cell supplier and capacity in over 100 countries. Tesla was number one in terms of battery capacity deployed accounting for almost 1 out of every 3 MWh deployed in March (including hybrids).

EV Metal Index jumps 85% in a month despite nickel, cobalt price pullback

In order to produce the most accurate data, the monthly battery capacity deployed numbers in the MINING.COM EV Metal Index do not include cars leaving assembly lines, those on dealership lots or in the wholesale supply chain —only end-user registered vehicles.  

Nickel use declines as LFP batteries gain market share

Cobalt and nickel deployment more than doubled compared to the same month last year, but on a per vehicle basis use of these cathode materials is trending down. 

Adamas says the global sales weighted  average amounts of nickel per vehicle (including hybrids) fell by 8% year on year on the back of strong sales of BEVs powered by LFP (lithium-iron-phosphate) cells such as the Tesla Model 3 made and sold in China and exported to Europe and the BYD Han EV, among others. 

EV Metal Index jumps 85% in a month despite nickel, cobalt price pullback

LFP-equipped cars are making inroads globally and a number of Chinese automakers are targeting western markets with LFP-equipped vehicles. From a fraction before the made-in-China Model 3 launched, the technology has now reached 15.7% market share based on Q1 2021 battery capacity deployed.  Adamas data shows the LFP Model 3 on its own captured 7.2% of the global electric car market.  

While Volkswagen has said LFP would be its go-to battery for its entry level models, BYD confirmed last month that it is going all-in on LFP batteries, scrapping NCM (nickel, cobalt, manganese) technology from its model line-up entirely. 

High nickel content in NCM cathodes improves energy density, but BYD and other LFP battery manufacturers have been closing the gap in terms of range and charging performance.  

Lithium rally has legs, cobalt and nickel prices decline

Average cobalt use in March was up an anemic 2% year on year and contrasts with a 122% jump in total tonnage deployed of the metal, which provides thermal stability for high nickel batteries. 

Average nickel sulfate prices fell by more than 10% in March from February while cobalt used in the battery supply chains, according to Benchmark Mineral Intelligence also declined but the priciest cathode material held above $60,000 a tonne – from a low of $30,000 a tonne in December 2019. 

Average lithium use was up 12% year over year while total material deployed was up a stunning 94% month on month.  Lithium prices continued to recover, topping $10,000 in March for the first time since August 2019. 

As a percentage of the overall index value, lithium represents 26%, up from a low of 20% in August last year.