Samsung, Panasonic, Tesla switching to lithium-iron-phosphate batteries; here’s why

A typical lithium-ion battery pack can contain nearly 14 kg of cobalt, which is usually used as it increases the life of batteries and energy density.

“For mass electrification to happen, there are lots of sentiments that cobalt needs to be eliminated or reduced to the bare minimum,” Chibueze Amanchukwu, professor at the University of Chicago, told CNBC.

As a byproduct of nickel and copper mining, prices of cobalt depend on the demand and price fluctuations of these metals. Hence, the prices of cobalt are extremely volatile.

Cobalt extraction is also linked to child labour and human rights abuses. “The majority of the world’s battery-grade cobalt reserves are located in the Democratic Republic of Congo, where the mining of cobalt is associated with human rights abuses and child labour,” Sam Adham, a senior powertrain research analyst at LMC Automotive, told CNBC.

About 70 percent of Congo’s mining sector and 80 percent of the cobalt refining industry is controlled by Chinese investors. The supply of cobalt has been impacted by the ongoing trade war between US and China.

This warrants a shift to a cheaper and viable option -- lithium iron phosphate (LFP) batteries.

Tesla’s Model Y and Model 3 vehicles manufactured in China use LFP batteries. The electric car manufacturer now plans to expand the use of LFP batteries in all entry-level Model 3 and Model Y vehicles. Volkswagen and Ford are also planning to offer vehicles with LFP batteries.

However, the use of cobalt-free batteries requires some trade-offs. “The main downside of LFP is low energy density and therefore driving range,” Adham said.