One transition currently underway in the EV and lithium ion battery space is the emergence of an 811 NCM (Nickel Cobalt Manganese) cathode. 811 stands for 8 parts nickel, 1 part cobalt, 1 part manganese. It is the natural evolution from the traditional 111 chemistry (equal parts of each), 523 (5 parts nickel, 2 parts cobalt and 3 parts manganese) and 622.
While the high nickel chemistry brings higher energy density and a much bigger demand profile for nickel, 811 has not yet fully arrived and is some years away from having a major impact.
Why the Shift away from 111?
- Cobalt Cost Pressure
In a 111 cell, cathode material equates to an estimated 40% of the cell cost – due to cobalt being a third of the input by volume.
This has resulted in a surge of 523 production and to a lesser extent 622 output globally – especially in China where cobalt’s input into a cathode is 20% while significantly increasing nickel’s role to 50% and 60% (from 30%), respectively.
- Auto Pressure.
Understandably, EV manufacturers want to do all they can to reduce their price risk exposure to cobalt. Thus, the push towards 523 and 622 brings with it increased energy density thanks to the nickel and seemingly lower costs. In turn, cathode manufacturers are pressured by the auto companies to speed up the evolution to 811 formulation
Lower cobalt cathodes, may not lead to lower cost
In reducing cobalt to a backseat role (the major element involved in stabilising the battery), is not without risk, Current manufacturing technology requires 811 cathodes to be produced in an inert environment as to prevent any reaction with the atmosphere. Therefore, any new cathode plant producing this material will require a dedicated, inert atmospheric, production line specific to 811
If 811 is 10% of the NCM future cathode market total by 2026, battery grade cobalt output – which was nearly 50,000 tpa in 2017, will have to increase to 205,000 tpa to meet the cobalt demands of the entire battery industry. This represents a 4 fold increase in demand; if 811 is 25% of the cathode market, 193,000 tonnes of battery grade cobalt demand is forecast.
View our disclaimer here: https://explorex.ca/investors/disclaimer/