Two non-stoichiometric low-Co AB5 alloys, Ml0.95Mg0.05Ni3.8Co0.3Mn0.3Al0.4 (AB4.8) and Ml0.95Mg0.05Ni3.6Co0.3Mn0.3Al0.4 (AB4.6), were designed to reduce the cost ofAB5 alloys. The maximum discharge capacities of the two low-Co alloys can reach 307 mAh/g forAB4.8 alloy and 298 mAh/g for AB4.6 alloy, respectively. After 300 cycles, the capacity decay is 23% for AB4.8 alloy and 19.1% for AB4.6 alloy. XRD patterns and the microstructure, examined by optic microscope and SEM, show that both of the two low-Co alloys are composed of three phases, LaNi5 matrix phase, AlMnNi2 secondary phase and LaNi tertiary phase. For the two low-Co alloys, the microhardness (HV) of the secondary phase are only half of that of the matrix phase, which could resist the crack propagating and make the alloys not amenable to pulverization. The small amount of Mg promotes to form the soft secondary phase, which is believed to be the reason for improving the cycling stability.