HSBC: lithium and cobalt costs are hampering sales of electric vehicles

SMM12 4-according to HSBC holding (HSBC Holdings Plc), the high prices of lithium and cobalt will hinder the growth of battery-driven car sales in the next few years. HSBC analysts Alexandre Falcao and Augusto Ensiki said in a report that by 2025, the global market share of all-electric vehicles will be lower than the previous estimate of 9.4%, below the previous estimate of 10.5%. At the same time, they doubled their market share of plug-in hybrid electric vehicles from 2.4 per cent to 5.5 per cent by 2025. "Lithium and cobalt prices are high, but the supply of pure electric vehicles is limited and demand is low," analysts said in the report. "there is a preference for more plug-in hybrid vehicles in the medium to short term than we had expected." Lithium supply will remain "reasonably tight".

HSBC raised its forecast for lithium demand in 2025 by 88% to 776000 tons from its last forecast a year ago. HSBC said the inflection point for electric vehicles would be around 2020, when battery costs should have fallen "substantially" and car companies would start selling new models.

HSBC said established lithium producers SQM and Livent Corp. Is most affected by the growth in demand. Glencore (Glencore Plc) and Vale (Vale SA) will also benefit because they produce other battery materials such as nickel, copper and cobalt, the report said. HSBC raised its target share price of SQM to $55 from $50 a share. The company also rated Livent as a buy, with a target share price of $22 a share.

And put the Albemarle Corp. The rating is set at holding, with a target share price of $112.5.

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