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Cobalt’s Future Driving Ahead with Hybrid Cars

High gas prices are moving the number hybrid cars sold into overdrive. And that is helping cobalt prices stay higher longer than anyone thought.

Look at this recent news headline from the Chicago Tribune:

“Battery-powered car race is on: Despite current cost and safety concerns, automakers see plug-ins and hybrids as remedy to future $5-a-gallon gasoline”

The article quoted a Ford Motors release, stating that it expects U.S. hybrid sales to reach 500,000 units this year, about 3 percent of the market, and to triple to 10 percent in a few years if gas reaches $5 a gallon and stays there.

Cobalt is a key ingredient in hybrid car batteries – and one of the reasons the price for cobalt has jumped from $25 to $50 per pound this year. There are anywhere from 5 to 18 pounds of cobalt in every hybrid car battery.

That’s a lot of new annual demand for cobalt. If the market did triple to 1.5 million units, even at 10 pounds cobalt per car, that makes 15 million new pounds of cobalt needed annually – a huge increase in a small 60,000 ton per year (120 million lbs) market.