Electric Car Fears Prompt Odd Apple Investment

Apple may be in a bidding war with electric vehicle battery makers for one key metal: cobalt. Apple's been one of the biggest users of cobalt over the past decade due to their ever-increasing production of iPhone, iPad, and other devices with their own rechargeable batteries. Now that electric vehicles are coming into vogue, demand for cobalt is going up so much that Apple may be opting to buy from the source.

Word comes from Bloomberg that Apple's in talks to "buy long-term supplies" of the metal cobalt "directly from miners for the first time." That's according to people familiar with the matter, while Apple's declined to comment on the situation.

Cobalt is used in rechargeable lithium-ion batteries. Rechargeable lithium-ion batteries power the vast majority of mobile smart devices in the world today. Over the past decade, smartphones have been the biggest growth area for cobalt use. According to Darton Commodities, that's about the change.

Darton Commodities suggested, as of mid-February (or well before) that "vehicle electrification is recognized as being the biggest growth area for cobalt use in the years to come." Charting of the price of cobalt in the graphic above was done by Mining dot com, published by Frik Els. The price of cobalt rose 129% annually on the LME (as shown) to the end of 2017. Pricing continued to rise through the first couple of months of February (and likely beyond).

According to Bloomberg NEF (New Energy Finance), carmakers are expected to move toward car batteries that use less cobalt as time goes on. But for now, there's a real crunch.

Samsung SDI is one company making moves toward batteries with smaller reliance on cobalt in the near future. Korea Times reported that an unnamed Samsung official said the company has "set sights on drastically reducing the amount of cobalt."

Samsung SDI CEO Jun Young-hyun suggested that the company "will lead the popularization of electric vehicles by developing products based on cutting-edge technology which will in an optimum manner meet the needs of our customers and the market." KT reported that Jun also said "Securing differentiated technologies and stable supply chains will pave the way for us to boost our competitiveness."

Bloomberg also reported that multiple companies, including BMW AG, Volkswagen AG, and Samsung SDI Co., are all "racing to sign multiyear cobalt contracts." Prices aren't likely going down any time soon.