(Bloomberg) -- Electric vehicles may be commonplace sooner than most people think, and that could signal a bonanza for Chilean lithium producer Soc. Quimica y Minera de Chile SA.
Larrain Vial, Chile's largest brokerage firm, sees global EV penetration at almost 21 percent by 2025, well above the market consensus of 8 percent to 20 percent, Alexander Varschavsky, a senior analyst, said in a research note. SQM, which produces lithium used in EVs' rechargeable batteries, has a 22 percent market share and could get a windfall if it can maintain that level, he said.
“Battery costs and maximum driving ranges are the primary barriers for EV adoption,” Varschavsky said. “But the current rate of progress indicates that the shift is happening faster than anticipated and that we are close to the tipping point.”
SQM is “ideally positioned” to be awarded a new concession by Chilean authorities once the current one expires in 2030, the note said. Its production capacity could reach 230,000 tons by 2024 as the company improves lithium-recovery rates in the Atacama salt flat, Varschavsky wrote. It has previously announced a capacity expansion to 180,000 tons from 63,000 tons.
To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillanlombr@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Margot Habiby, Steven Frank
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