Panasonic Batteries Supplied to Tesla May Contain Cuban Cobalt

The company has suspended its relationship with a supplier over concerns about U.S. sanctions.

Panasonic

Panasonic may have supplied batteries to Tesla containing cobalt from Cuba, a country subject to United States sanctions, reports Reuters. The Japanese electronics giant, which is the sole supplier of batteries to Tesla, has reportedly suspended relations with a Canadian supplier as a result.

Two anonymous sources familiar with the matter told Reuters that cobalt used by Panasonic in Tesla batteries was mined in Cuba by Canadian firm Sherritt International Corp. However, a Panasonic spokesperson would only confirm to Reuters that the company had "chosen to suspend its relationship with its Canadian supplier," without naming the supplier.

The spokesperson confirmed that the company had used cobalt from this Canadian supplier in batteries for the Tesla Model S and Model X, but only after February of this year, adding that the company "has sought guidance from the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) regarding its interpretation of the scope of the U.S. ban on Cuban-origin imports."

The U.S. imposed strict sanctions on Cuba after Fidel Castro's rise to power and the installation of a communist government more than 50 years ago. According to Reuters, Panasonic is unsure of how much Cuban cobalt may have ended up in the U.S. because material from multiple suppliers is "co-mingled" during the battery manufacturing process. Panasonic has said it wants to develop cobalt-free batteries, but has offered few other details.

Tesla did not respond to a request by The Drive for comment in time for publication. A spokesperson told Reuters that "Tesla is aiming to achieve close to zero usage of cobalt in the near future," but did not directly address the question of whether batteries in its cars contained Cuban cobalt, whether that would put the company in violation of sanctions, or whether Panasonic's decision to cut ties with its Canadian supplier would affect the supply of batteries.

The episode highlights the difficulty in sourcing materials for electric-car batteries. Cobalt is a vital ingredient in current lithium-ion batteries, but the supply is limited, and accessing it can be problematic. Most of the world's cobalt comes from the Democratic Republic of Congo, which has a poor human-rights record and an unstable government. But as automakers prepare to ramp up production of electric cars in order to meet stricter emissions standards, demand for cobalt will likely grow.

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