With the surge in demand for electric vehicles causing the need for more ‘Gigafactories’ to be built, demand is high for lithium ion batteries’ key ingredient: cobalt.
Cobalt is an earth metal that makes up about 35 percent of the lithium ion battery mix — the battery used in EVs and smartphones. The battery business makes up 42 percent of the global cobalt demand, and companies such as Tesla, Apple and Google are scrambling to secure as much of the precious metal as possible. Like most things, this is easier said than done.
Cobalt supply is already in a severe deficit and that’s without considering the exponential increase of nearly 500 percent in demand that is to come in the near future with the rise in popularity of EVs. Analysts at Macquarie Research predict that the global deficit for cobalt supply will reach 885 tons this year increasing year-over-year to about 5,340 tons in 2020. That’s a big problem.
Source: Materialscientist via Wikimedia Commons
Why not just get more cobalt?
The answer is not that simple.
Nearly 60 percent of the planet’s global cobalt supply comes from the tumultuous Democratic Republic of Congo where mining procedures aren’t exactly the portrait of safety. It’s reported that over 40,000 child workers employ the vast cobalt mines of the Congo and the UN estimates that 80 children die per year working in the mines. Among other hazards such as unsupervised and unprotected mining, excessive exposure can cause “cobalt lung” — a form of pneumonia that can lead to long-term respiratory illness and death.
With the extremely hazardous conditions of mines in the Congo going vastly unreported until recently, it is fair to expect that CEOs of tech companies will have to start answering some hard-hitting questions about the ethical sourcing of their cobalt supply.
So what does this all mean?
Well it means several different things depending on who you are.
If you’re an industry giant who consumes mass quantities of cobalt for production, you’re prob
U.S. Cobalt has key assets in Idaho, Utah and Alberta (Source: U.S. Cobalt)
ably looking for alternatives to the Congo. A more homegrown solution to this problem may be U.S. Cobalt. Tesla’s new Gigafactory in Reno, NV, will soon become the largest producer of lithium ion batteries in the world — for that they will need a lot of cobalt, something that may be difficult considering the global competition for this precious metal. Ethically sourced American cobalt could be the answer that Tesla needs.
If you’re an investor at a hedge fund, the cobalt deficit could mean big bucks for you. Several firms have begun buying up large physical amounts of cobalt in a hoarding maneuver. The plan is that they will hold the cobalt supply until demand increases more. The metal is now sold at around $19 per pound — a 50 percent increase since September 2017. Investors will likely sit on the supply until it’s increased to around $25 per pound. Several of these purchasers are the China State Reserve who bought 5,000 tons, and Pala Investments, Ltd. Pala has recently started a $150 million fund to buy more of the Earth’s cobalt supply.
“We have been focused on the evolution of the battery chemistries and this has allowed us to invest early in different components of the battery,” Stephen Gill, managing partner at Zug, Switzerland-based Pala Investments, told Bloomberg. “We hope to continue to be ahead of the curve as technologies evolve.”
For now they certainly are ahead of the curve, but this could potentially be a lucrative position for even the most modest investor. Right now on the Toronto Stock Exchange, U.S. Cobalt (TSX: USCO.V) is trading at around just 42 cents. Investors could quickly snatch up large amounts of stock at a low price, in hopes that the cobalt demand shifts from the Congo to America.
Renowned mathematician Banesh Hoffman said it best, “with every new discovery in science brings with it a host of new problems.” That certainly rings true in the search for an alternative to gas-burning vehicles, where we found a solution, only to discover the dire conditions involved in sourcing it.
Energy
Tesla Lathrop Megafactory celebrates massive Megapack battery milestone
The Tesla Megapack is the backbone of Tesla Energy’s battery deployments.
The Tesla Lathrop Megafactory recently achieved a new milestone. As per the official Tesla Megapack account on X, the Lathrop Megafactory has produced its 15,000th Megapack 2 XL battery.
15,000 Megapack Batteries
Tesla celebrated the milestone with a photo of the Lathrop Megafactory team posing with a freshly produced Megapack battery. To commemorate the event, the team held balloons that spelled out “15,000” as they posed for the photo.
The Tesla Megapack is the backbone of Tesla Energy’s battery deployments. Designed for grid-scale applications, each Megapack offers 3.9 MWh of energy and 1.9 MW of power. The battery is extremely scalable, making it perfect for massive energy storage projects.
More Megafactories
The Lathrop Megafactory is Tesla’s first dedicated facility for its flagship battery storage system. It currently stands as the largest utility-scale battery factory in North America. The facility is capable of producing 10,000 Megapack batteries every year, equal to 40 GWh of clean energy storage.
Thanks to the success of the Megapack, Tesla has expanded its energy business by building and launching the Shanghai Megafactory, which is also expected to produce 40 GWh of energy storage per year. The ramp of the Shanghai Megafactory is quite impressive, with Tesla noting in its Q1 2025 Update Letter that the Shanghai Megafactory managed to produce over 100 Megapack batteries in the first quarter alone.
Tesla Energy’s Potential
During the first quarter earnings call, CEO Elon Musk stated that the Megapack is extremely valuable to the energy industry.
“The Megapack enables utility companies to output far more total energy than would otherwise be the case… This is a massive unlock on total energy output of any given grid over the course of a year. And utility companies are beginning to realize this and are buying in our Megapacks at scale,” Musk said.
Energy
Tesla Megapacks powers the xAI Colossus supercomputer
Tesla Megapacks step in to stabilize xAI’s Colossus supercomputer, replacing natural gas turbines. Musk’s ventures keep intertwining.
Tesla Megapack batteries will power the xAI Colossus supercomputer in Memphis to ensure power stability. The collaboration between Tesla and xAI highlights the synergy among Elon Musk’s ventures.
The artificial intelligence startup has integrated Tesla Megapacks to manage outages and demand surges, bolstering the facility’s reliability. The Greater Memphis Chamber announced that Colossus, recently connected to a new 150-megawatt electric substation, is completing its first construction phase. This transition addresses criticism from environmental justice groups over the initial use of natural gas turbines.
“The temporary natural gas turbines that were being used to power the Phase I GPUs prior to grid connection are now being demobilized and will be removed from the site over the next two months.
“About half of the operating turbines will remain operating to power Phase II GPUs of xAI until a second substation (#22) already in construction is completed and connected to the electric grid, which is planned for the Fall of 2025, at which time the remaining turbines will be relegated to a backup power role,” the Chamber stated.
xAI’s rapid development of Colossus reflects its ambition to advance AI capabilities, but the project has faced scrutiny for environmental impacts. The shift to Megapacks and grid power aims to mitigate these concerns while ensuring operational continuity.
The Megapack deployment underscores the collaboration among Musk’s companies, including Tesla, SpaceX, Neuralink, and The Boring Company. Tesla appears to be the common link between all of Musk’s companies. For example, The Boring Company built a tunnel in Giga, Texas. In addition, Musk has hinted at a potential collaboration between the Tesla Optimus Bot and Neuralink. And from January 2024 to February 2025, xAI invested $230 million in Megapacks, per a Tesla filing.
Tesla Energy reported a 156% year-over-year increase in Q1 2025, deploying 10.4 GWh of storage products, including Megapacks and Powerwalls. Tesla’s plans for a new Megapack factory in Waller County, Texas, which is expected to create 1,500 jobs in the area, further signal its commitment to scaling energy solutions.
As xAI leverages Tesla’s Megapacks to power Colossus, the integration showcases Musk’s interconnected business ecosystem. The supercomputer’s enhanced stability positions xAI to drive AI innovation, while Tesla’s energy solutions gain prominence, setting the stage for broader technological and economic impacts.
Energy
Tesla Energy celebrates one decade of sustainability
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy recently celebrated its 10th anniversary with a dedicated video showcasing several of its milestones over the past decade.
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy Early Days
When Elon Musk launched Tesla Energy in 2015, he noted that the business is a fundamental transformation of how the world works. To start, Tesla Energy offered the Powerwall, a 7 kWh/10 kWh home battery system, and the Powerpack, a grid-capable 100 kWh battery block that is designed for scalability. A few days after the products’ launch, Musk noted that Tesla had received 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack.
Tesla Energy’s beginnings would herald its quiet growth, with the company later announcing products like the Solar Roof tile, which is yet to be ramped, and the successor to the Powerwall, the 13.5 kWh Powerwall 2. In recent years, Tesla Energy also launched its Powerwall 3 home battery and the massive Megapack, a 3.9 MWh monster of a battery unit that has become the backbone for energy storage systems across the globe.
Key Milestones
As noted by Tesla Energy in its recent video, it has now established facilities that allow the company to manufacture 20,000 units of the Megapack every year, which should help grow the 23 GWh worth of Megapacks that have already been deployed globally.
The Powerwall remains a desirable home battery as well, with more than 850,000 units installed worldwide. These translate to 12 GWh of residential entry storage delivered to date. Just like the Megapack, Tesla is also ramping its production of the Powerwall, allowing the division to grow even more.
Tesla Energy’s Role
While Tesla Energy does not catch as much headlines as the company’s electric vehicle businesses, its contributions to the company’s bottom line have been growing. In the first quarter of 2025 alone, Tesla Energy deployed 10.4 GWh of energy storage products. Powerwall deployments also crossed 1 GWh in one quarter for the first time. As per Tesla in its Q1 2025 Update Letter, the gross margin for the Energy division has improved sequentially as well.
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