By Abhijith Ganapavaram
(Reuters) -General Motors Co said on Tuesday it would buy cobalt from miner Glencore (OTC:GLNCY) PLC to use in its electric vehicles (EVs), as automakers around the world scramble to stock up on the critical raw material amid supply chain disruptions.
Global automakers, ranging from EV leader Tesla (NASDAQ:TSLA) Inc to Volkswagen (DE:VOWG_p), are splurging billions of dollars on developing vehicles for a market that could be worth $5 trillion over the next decade.
However, metals to make batteries that last longer hard to come by due to supply chain disruptions, which has led to automakers rushing to secure supplies of lithium, nickel and cobalt.
The prices of these rare metals have soared to multi-year highs.
Cobalt, a metal that makes up 0.001% of the earth's crust, ensures cathodes do not easily overheat or catch fire and helps extend the life of batteries, which automakers usually guarantee for eight to 10 years.
The cobalt, secured from Glencore's Murrin Murrin operation in Australia, will be used in GM's Ultium battery cathodes, which powers the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq vehicles, the companies said in a joint statement https://
They did not disclose the size of the deal.
GM, which has laid out plans to ramp up capacity to build one million EVs in North America by the end of 2025, also has an agreement with General Electric (NYSE:GE) Co to develop a supply chain of rare earth and other materials.
It had also announced it would invest in a U.S. lithium project last year, which could become the country's largest by 2024.
Rival Ford Motor (NYSE:F) Co said on Monday it had signed a preliminary deal to buy lithium from a Lake Resources NL facility in Argentina.