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 inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure
Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.
Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.
Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.
Tesla delivers 384,000 vehicles in Q2 2025, deploys 9.6 GWh in energy storage
It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.
LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.
The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.
For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.
During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”
It seems as if Tesla has managed to secure some of this needed domestic supply chain.
Energy
Tesla Shanghai Megafactory produces 1,000th Megapack for export to Europe
The Shanghai Megafactory was able to hit this milestone less than six months after it started producing the Megapack.
Tesla Energy has announced a fresh milestone for its newest Megapack factory. As per the electric vehicle maker, the Shanghai Megafactory has successfully produced its 1,000th Megapack battery.
The facility was able to hit this milestone less than six months after it started producing the grid-scale battery system.
New Tesla Megapack Milestone
As per Tesla Asia in a post on its official accounts on social media platform X, the 1,000th Megapack unit that was produced at the Shanghai Megafactory would be exported to Europe. As noted in a CNEV Post report, Tesla’s energy products are currently deployed in over 65 countries and regions globally. This allows Tesla Energy to compete in energy markets that are both emerging and mature.
To commemorate the 1,000th Megapack produced at the Shanghai Megafactory, the Tesla China team posted with the grid-scale battery with celebratory balloons that spelled “Megapack 1000.” The milestone was celebrated by Tesla enthusiasts on social media, especially since the Shanghai Megafactory only started its operations earlier this year.
Quick Megafactory Ramp
The Shanghai Megafactory, similar to Tesla’s other key facilities in China, was constructed quickly. The facility started its construction on May 23, 2024, and it was hailed as Tesla’s first entry storage project outside the United States. Less than a year later, on February 11, 2025, the Shanghai Megafactory officially started producing Megapack batteries. And by March 21, 2025, Tesla China noted that it had shipped the first batch of Megapack batteries from the Shanghai plant to foreign markets.
While the Shanghai Megafactory is still not at the same level of output as Tesla’s Lathrop Megafactory, which produces about 10,000 Megapacks per year, its ramp seems to be quite steady and quick. It would then not be surprising if Tesla China announces the Shanghai Megafactory’s 2,000th Megapack milestone in the coming months.
Energy
Tesla launches first Virtual Power Plant in UK – get paid to use solar
Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom.
Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom. This feature enables users of solar panels and energy storage systems to sell their excess energy back to the grid.
Tesla is utilizing Octopus Energy, a British renewable energy company that operates in multiple markets, including the UK, France, Germany, Italy, Spain, Australia, Japan, New Zealand, and the United States, as the provider for the VPP launch in the region.
The company states that those who enroll in the program can earn up to £300 per month.
Tesla has operated several VPP programs worldwide, most notably in California, Texas, Connecticut, and the U.S. territory of Puerto Rico. This is not the first time Tesla has operated a VPP outside the United States, as there are programs in Australia, Japan, and New Zealand.
This is its first in the UK:
Our first VPP in the UK
You can get paid to share your energy – store excess energy in your Powerwall & sell it back to the grid
You’re making £££ and the community is powered by clean energy
Win-win pic.twitter.com/evhMtJpgy1
— Tesla UK (@tesla_uk) July 17, 2025
Tesla is not the only company that is working with Octopus Energy in the UK for the VPP, as it joins SolarEdge, GivEnergy, and Enphase as other companies that utilize the Octopus platform for their project operations.
It has been six years since Tesla launched its first VPP, as it started its first in Australia back in 2019. In 2024, Tesla paid out over $10 million to those participating in the program.
Participating in the VPP program that Tesla offers not only provides enrolled individuals with the opportunity to earn money, but it also contributes to grid stabilization by supporting local energy grids.
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