Cob has a insulation value of 0.3 to 1.0 per inch, Depending on the amount of fiber used.
So at best a 12 inch thick wall would only have a R-12 value, probably closer to R-6.
http://www.greenhomebuilding.com/QandA/cob/insulation.htm
So you are correct in assuming that this will not work.
Except it does work. Under certain conditions aka the usual it depends
A) If your summer day time high is 100F and night time low is 65F with a daily or weekly avg temp of 78F.
The thermal mass will make your indoor temp 78F
B) If your winter day time high is 70F and night time low 40F with a daily/weekly avg of 50F.
Your indoor temp will be 50F. Fine with a blanket and a bit of fire
C) In the tropics with a high of 88F and low of 78F. A cob vs a metal housing (car), will provide quite a bit of moderation from the direct sunlight.
Where it doesn't work is where you a avg temp of 20F. High 35F, low of 5F. So subtropical/tropical/desert areas are where it works best year round.
SOLUTIONS:
1) Make the walls super thick, as in 36inches thick for a R-value up to R-36.
2) Place insulation on the outside wall to increase the R-value. Insulation could be strawbale with a thin plaster of mud.