SANTIAGO – 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.
Larrain Vial, Chile’s largest brokerage firm, sees global EV penetration at almost 21% by 2025, well above the market consensus of 8% to 20%, Alexander Varschavsky, a senior analyst, said in a research note. SQM, which produces lithium used in EVs’ rechargeable batteries, has a 22% 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 t 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 t from 63 000 t.