EVs emit no carbon dioxide, and transportation electrification - which currently accounts for approximately 14% of global greenhouse gas emissions - is essential to combating climate change. In addition to lithium and nickel, electric car batteries also require cobalt, a blue-gray metal found in nickel and copper deposits. Batteries account for one third of the cost of an electric vehicle, and metals account for 25% to 40%. Most lithium batteries contain cobalt, which prevents them from overheating and makes them safer. Additionally to powering electric vehicles, lithium-ion batteries are used for energy storage.

Due to rising EV demand, cobalt prices doubled in 2021, rising from $31,000 to over $70,000 per ton. As EV demand grows, even if cobalt content per battery decreases, cobalt demand will remain strong. Although cobalt supply is expected to grow in 2022 with supply chain bottlenecks cleared, Benchmark Mineral Intelligence predicts a cobalt shortage by 2025, which will boost cobalt prices.