Tesla Inc. TSLA battery supplier Panasonic Corporation PCRFY is working to fulfill the electric vehicle giant's ambition of increasing the affordability of its vehicles.
One of the ways? A cobalt-free battery.
What Happened: "Two or three years from now, we will be able to introduce a cobalt-free high energy-density cell," Shawn Watanabe, Panasonic head of energy technology and manufacturing, said at the 2021 Consumer Electronics Show, according to a Nikkei report. Panasonic is Tesla’s longtime battery supplier and now produces lithium-ion batteries.
Related Link: Nio Reportedly Planning Entry-Level Models With Cheaper Batteries From CATL
Why It's Important: Lithium-ion batteries usually have cathodes that contain cobalt. Despite its ability to boost energy density and prolong battery life, cobalt is relatively expensive. This boosts the battery cost, which represents roughly 30% of the EV cost currently.
Additionally, cobalt is mined primarily in the Democratic Republic of the Congo, which uses child labor for the process.
Cost consciousness and ethical issues with respect to the supply chain have led to calls for replacing cobalt.
The Japanese company's decision to move away from cobalt augurs well for Tesla, as the EV maker is working toward increasing the penetration of clean energy vehicles.
Click here to check out Benzinga's EV Hub for the latest electric vehicles news.
A recent report in the Korea Times suggested that LG Solutions, which also supplies batteries to Tesla, is planning to manufacture nickel-heavy NCMA batteries.
Price Action: Tesla shares ended Wednesday's session higher by 0.59% at $854.41, while OTC Panasonic shares gained 0.32% to $12.59.
Related Link: Elon Musk Teases Telsla All Day
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