Lithium, Cobalt Costs Hinder Battery-Powered Car Sales: HSBC
(Bloomberg) -- High prices for lithium and cobalt will hinder sales growth in battery-powered vehicles the next few years, according to HSBC Holdings Plc.
Global market share by 2025 for fully electric vehicles will be lower than previously projected -- 9.4 percent, compared with an earlier estimate of 10.5 percent, HSBC analysts Alexandre Falcao and Augusto Ensiki said in a report. At the same time, they doubled their forecast for plug-in hybrid EVs to 5.5 percent of the market by 2025, from 2.4 percent.
“High lithium and cobalt prices – but also limited supply and lower demand for pure EVs -– now favor more plug-in hybrids in the short to medium term vs. our previous expectation,” the analysts said in the report.
Lithium supply will remain “reasonably tight” amid new-output delays, canceled and shelved projects, robust battery demand globally and a continued push by China's government for electric vehicles, according to the report. HSBC raised its 2025 lithium-demand forecast by 88 percent from its last estimate more than a year ago, to 776,000 tons.
The inflection point for EV adoption will be around 2020, when battery costs should have fallen “significantly” and major auto companies will start selling their new EV models, HSBC said.
Established lithium producers SQM and Livent Corp. are the best stocks to gain exposure to demand increases, HSBC said. Glencore Plc and Vale SA are also set to benefit, as they produce other battery materials such as nickel, copper and cobalt, according to the report. HSBC upgraded SQM's rating to a buy and raised its price target to $55 a share from $50. It also initiated coverage of Livent with a buy rating and a price target of $22 a share, and gave Albemarle Corp. a hold rating and a price target of $112.50.
--With assistance from Steven Frank.
To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter, Reg Gale
©2018 Bloomberg L.P.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
