Cobalt demand driven by the new electric vehicle sales in China: scenario analysis based on Bass model

Abstract

Battery electric vehicles and plug-in hybrid electric vehicles grow rapidly and the cumulative stock of them has exceeded 5 million by 2020 in China. The trend of massive automotive electrification is expected to continue because of China's ambitious goal of carbon neutrality, for which cobalt is a critical and expensive material. Under this background, we combine Bass model and scenario analysis to project the cobalt demand driven by the new electric vehicles sales from 2021 to 2030. Results show that (1) In the next ten years, the highest annual cobalt demand comes in 2023, 2026, and 2029 under the pessimistic, neutral, and optimistic scenario, respectively; (2) under the pessimistic scenario, the highest annual cobalt demand for the 70\% market share of ternary lithium battery will reach 26.31 kt, while 39.82 kt and 60.99 kt under the neutral and optimistic scenarios, respectively. Under each scenario, the highest annual cobalt demand in the case of 70\% market share is 16.67\% higher than the 60\% market share case and 40\% higher than the 50\% case; (3) promoting less cobalt intensive battery chemistries, such as NCM811 and NCA, brings forward the peak demand two years earlier under the pessimistic scenario and one year earlier under the neutral scenario. Policy implications are provided based on these results to alleviate the supply pressure of cobalt for China.