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Shares of SQM and other important global lithium producers plummeted this Wednesday after, in the framework of the “Battery Day” event, Elon Musk, the founder and owner of Tesla, the main manufacturer of electric cars to Global level, it will announce that they will seek to apply new technologies that allow reducing dependence on mineral to save costs in the manufacture of batteries.
SQM-B shares closed with a 9.2% decline at $ 23,100 on the Santiago Stock Exchange, which marked their lowest level since August 3 and their worst daily performance since March 18.
Meanwhile, the series A papers fell 6.18% to $ 18,202.
Thus, during the day, the non-metallic mining company lost US $ 608.14 million in market capitalization, which fell to US $ 6,895.3 million.
The drop in shares led the Santiago Stock Exchange to issue a query to the company requesting an explanation for said decline. In response Ricardo Ramos, general manager of SQM, pointed out that “In this regard, we can inform you that we do not know of any fact or event that could explain the variation in the share price.”
Prior to the Tesla event, which took place yesterday, Investors expected the potential for cheaper batteries to boost electric car penetration and with it demand for lithium, but now Musk’s announcement changes the outlook for the sectorMorgan Stanley analyst Javier Martínez de Olcoz said in a note.
“Excitement will be replaced by concerns, as the new technologies announced may reduce lithium use and production costs,” he added.
To this was added that Musk indicated that the company will enter the lithium business, through its own production of the deposits it owns in Nevada, United States.
Meanwhile, Aleksey Yefremov, a KeyBanc analyst, said that Tesla’s “Battery Day” was not the long-awaited positive catalyst for the lithium stocks under its hedge: producers Albemarle and Livent.
“While Tesla’s claims regarding lithium will be questioned, the initial conclusions are not positive for established lithium players,” he said.
In fact, the papers of the US giant Albemarle sank 14.68% to US $ 81.28 on Wall Street, Livent fell 7.33% to US $ 7.71 and those of Lithium Americas lost 18.28% to US $ 9, 79.
But Musk’s announcements not only disappointed investors in lithium producers, they also disappointed those of Tesla itself.
Shares of the electric car maker plunged 10.65% to US $ 379.06 on the New York Stock Exchange, after losing US $ 50 million of market capitalization the previous day.
Investors expected that the event, in which other company executives are participating in addition to Musk, would make two important announcements, which were not fulfilled: the development of a battery of a “million miles” that lasts 10 years or more, and a specific cost reduction target expressed in dollars per kilowatt hour, which would ultimately lower the price of an electric vehicle below that of a gasoline one.
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