BMW Joins Race to Secure Cobalt for EV Batteries

With one eye on accelerating demand for electric vehicles, BMW AG said it is talking to suppliers of cobalt and other battery materials amid fears that stocks will run short and push already inflated prices higher.

Sourcing of cobalt and other materials is “the most important” question BMW has to address before it decides whether to produce its own battery cells, board member Oliver Zipse said at a media briefing. Currently BMW assembles, but does not produce its own battery cells, Bloomberg reported.

Zipse’s comments come a day after Bloomberg reported Volkswagen AG invited producers of cobalt for talks at its German headquarters this week. Cobalt, one of the year’s best-performing metals, is a main chemical used in electric car battery cells, along with nickel and magnesium. Zipse declined to go into details of the discussions with suppliers.

More than one-half of the world’s cobalt is sourced from the Democratic Republic of Congo, and long-term demand is expected to outpace supply due to the rise of electric vehicles.

Securing long-term access to the material will be crucial for car-makers like BMW, who on Friday also announced a 200 million-euro ($237 million) investment into a new battery prototype center in Munich.

“For all these elements we have a detailed strategy for the future that secures our volume need as well as the origin and the type of production, so that we can obtain it in good conscience,” Zipse said.