Electric Cars

A London-based cobalt trading firm is set to raise £174 million through a rare stock market listing, betting on the future demand for electric car batteries despite investor concerns about the pace of electric vehicle adoption. The company aims to acquire cobalt supplies from a leading FTSE 100 mining corporation, while acknowledging challenges in the industry such as fluctuating prices and slower-than-expected growth in electric vehicles.

Despite these challenges, the company insists that current oversupply is temporary and presents an opportunity to buy at lower costs. Furthermore, global regulations banning petrol and diesel cars are expected to boost battery demand, even if automakers' investments in electric vehicles have slowed down.

Capitalizing on Cobalt's Strategic Value

Cobalt Holdings plans to leverage its financial resources to build a strategic reserve of cobalt, which plays a critical role in stabilizing lithium-ion batteries used in high-performance electric vehicles. This move comes amid rising global demand for cobalt, driven by increasing reliance on NMC (nickel, manganese, cobalt) battery chemistry for longer-range EVs.

Founder Jake Greenberg emphasized the importance of timing in establishing a cobalt stockpile. He pointed out that historical long-term cobalt prices have consistently exceeded spot prices, suggesting potential value in acquiring cobalt now. Additionally, export restrictions imposed by the Democratic Republic of Congo could further tighten supply, enhancing the strategic significance of securing cobalt reserves. Greenberg highlighted the dramatic increase in cobalt demand over recent years and projected continued growth due to accelerating EV battery needs.

Navigating Market Dynamics and Challenges

The company acknowledges the complexities of the cobalt market, including slowing investments in electric vehicles by major automakers and declining cobalt prices. Despite these challenges, Cobalt Holdings believes the current market conditions offer a unique opportunity to purchase cobalt at favorable rates before anticipated demand surges. The transition away from fossil fuel vehicles remains a key driver of future battery demand.

While some manufacturers opt for cheaper alternatives like lithium iron phosphate (LFP) batteries, NMC chemistry remains dominant for higher-performance vehicles. Global trends indicate bans on petrol and diesel cars will continue driving battery demand, particularly in regions like the UK and EU. Meanwhile, China's CATL, the world's largest battery producer, recently announced a significant capital raise, underscoring ongoing investment interest in the sector. In contrast, Cobalt Holdings' listing represents one of the largest in London over the past two years, reflecting broader market dynamics affecting IPO activity. Concerns persist regarding ethical sourcing practices in major cobalt-producing regions, adding another layer of complexity to the industry landscape.

In April 2025, Tesla experienced a notable decline in sales within the Chinese market, marking an 8.6% year-on-year decrease to 28,731 units. This drop contrasts sharply with the broader battery electric vehicle (BEV) market in China, which saw a robust 38% increase during the same period. Tesla’s flagship Model Y also witnessed a significant 24% dip in sales compared to the previous year. Despite these setbacks, Tesla managed to export nearly 30,000 vehicles from its Chinese factory, reflecting a slight decline from the prior year. Analysts attribute Tesla's struggles in China not to public sentiment towards Elon Musk but rather to fierce domestic competition and the absence of new model introductions.

Details of Tesla's Performance Amid Rising Competition

In the vibrant spring season of 2025, Tesla faced mounting pressure in the Chinese automobile industry. The company sold just over 28,000 cars domestically in April, representing a substantial decrease both annually and from the preceding month. Notably, the popular Model Y accounted for approximately 20,000 units, down by more than a fifth from its performance in April 2024. Meanwhile, overall BEV sales surged to over half a million units in China, highlighting the growing appetite for electric mobility.

Export figures from Tesla's Chinese facilities also reflected a minor downturn, totaling around 29,700 cars—a modest reduction compared to the previous year. Cumulatively, Tesla’s share in the all-electric segment shrank significantly from March levels. For the first four months of 2025, Tesla sold about 163,000 units locally while exporting close to 68,000 cars, showing a marked decrease from the corresponding period in 2024.

Experts suggest that Tesla’s reliance on older models like the Model Y is unsustainable given the rapid innovation pace set by local manufacturers such as BYD, Nio, and Xpeng. These companies offer cutting-edge features including advanced connectivity, faster charging capabilities, and competitive pricing, appealing strongly to tech-savvy Chinese consumers.

From a journalistic perspective, this situation underscores the importance of continuous product development even for established brands. As global automakers navigate dynamic markets characterized by intense rivalry and evolving consumer preferences, staying ahead requires relentless innovation and adaptability. It serves as a cautionary tale about complacency amidst rapid technological advancements and shifting cultural attitudes towards national brands.