Panasonic Batteries for Tesla Might Contain Cuban Cobalt

Electronics firm Panasonic Corp. announced the suspension of its dealings with its Canadian supplier, as the company grew concerned over the use of Cuban cobalt in the batteries that it provides for auto giant Tesla Inc.

The decision came as Panasonic was unable to determine how much cobalt in its batteries that were offered to the US market came from Cuba through its Canadian supplier, as a result of co-mingling of sources by its suppliers in several stages of the manufacturing processes.

Cuba has been subject to U.S. sanctions, after former Prime Minister Fidel Castro nationalized swathes of US assets more than 50 years ago.

Panasonic has consulted the US Treasury Department’s Office of Foreign Assets Control (OFAC) about its understanding of the scope of the US ban on Cuban-origin imports.

The US Treasury refused to discuss about the investigation and was unable to verify whether one existed.

Tesla’s Cars Potentially Having Cuban Cobalt Batteries

With Panasonic being an exclusive supplier for batteries in Tesla’s cars, its Model S and Model X also contained batteries with cobalt sourced from its Canadian supplier.   

A spokeswoman for Panasonic stated that it was only after February this year that the Canadian supplier provided cobalt for batteries of the Model S and Model X.

Panasonic chose to not name the Canadian supplier, although two people with knowledge of the matter said some of the cobalt that the Japanese group uses to make Tesla’s batteries is mined in Cuba via Canadian supplier Sherritt International Corp.

Sheritt produces the metal at the Moa mine in Cuba, a joint venture between the Canadian company and the state-owned General Nickel Company of Cuba.

The company did not respond to questions on whether it sold cobalt to Panasonic, as they do not comment about specific client activities, according to the company’s spokesman Joe Racanelli.

Tesla also declined to comment on whether its batteries contained Cuban cobalt, or whether the issue might suggest that it have breach sanctions, but a spokesman for the carmaker said the firm intends to achieve a nearly zero usage of cobalt in the future.

Tesla said in May it had been working for many years to cut its cobalt use in its batteries.

Cobalt is a vital component in car batteries, which has grown in demand and price over the past couple of years due to a projected electric-vehicle (EV) revolution.

Several companies are facing pressure over proving that the minerals they use were mined from locations that do not employ children, or pose a threat to the environment.

The Democratic Republic of Congo, a country divided by conflict and political instability, is currently the major source of cobalt worldwide.

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