Cobalt & EV: LFP Chemistry Reduces Risk, But Does Not Eliminate It - Residual Vulnerabilities Persist

The EV sector has massively adopted cobalt-free LFP batteries. But OilPrice warns: manufacturers that retain the NMC chemistry (high energy density) remain exposed to major supply disruptions concentrated in the DRC. The phantom risk is still there.

The Fact

According to OilPrice (June 22, 2026), the global EV industry faces a structurally underestimated cobalt supply risk. While Tesla (LFP standard-range) and BYD (Blade LFP batteries) have reduced their exposure, premium and long-range vehicles continue to use NMC (Nickel-Manganese-Cobalt) chemistry, with 10-15 kg of cobalt per battery. Around 70% of global cobalt production is concentrated in the DRC, a country with high political and logistical risks.

Our Take

The shift to LFP has displaced cobalt risk, not eliminated it. The NMC segment remains dominant in high-density vehicles (long-range SUVs, premium models), precisely those where automakers' margins are highest. A major disruption in the DRC (political instability, mine closures) would trigger a supply crisis primarily affecting BMW, Mercedes, and Tesla’s premium segments. Cobalt prices remain at the bottom of the cycle (~$28,000/ton in June 2026), creating a false sense of security in automakers' balance sheets.

To Watch

Cobalt prices (LME); investment decisions on NMC → LFP substitution for the premium segment; EU EV registrations for May 2026.