Why Lithium Prices Could Accelerate to Higher Highs

Sep 27, 2022
3D Render White Blue Lithium Batteries abstract concept

Electric vehicle stocks may be some of the safest.

That’s because EV sales may be on course to hit all-time highs this year, according to the International Energy Agency (IEA).  

According to CNBC, “The IEA said global sales had doubled in 2021 to represent nearly 9% of the car market. Looking forward, 2022 was ‘expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally.’”

Just in China, The China Passenger Car Association says the country could sell about six million new electric vehicles this year.  That’s more than double year-ago numbers.

Even more impressive, the IEA said EV sales hit 6.6 million in 2021.  And that in the first quarter of 2022, sales were already up to two million, a 75% increase year over year.  Not only is that great news for electric vehicle stocks, like Tesla (TSLA) and Nio (NIO), it’s even better news for lithium stocks.  After all, lithium is one of the most needed elements of an EV.

Consider this.

“Lithium carbonate prices in China, the benchmark in the fast-growing market, stand at about $71,000 a metric ton, according to price-assessment firm Benchmark Mineral Intelligence. That is almost four times as high as a year ago and just below the record set this March in yuan terms,” says The Wall Street Journal.

There’s a considerable amount of demand.

Unfortunately, there are also severe supply shortages, which is great news for stocks such as Albemarle (ALB), which jumped from about $150 to $265 in recent months.  Or, take a look at Lithium Americas (LAC), which ran from about $20 to a current price of $26.  Even American Lithium Corp. (LIACF), which sank from about $2.60 to $1.47 appears to be a bargain.

Another route is with lithium ETFs, such as the Global X Lithium Battery Tech ETF (LIT).  Not only does this ETF offer great diversification, it does so at less cost.  The ETF offers exposure to stocks, such as Albemarle (ALB), BYD Co. (BYD), LG Chem (LG), Tesla (TSLA), Livent Corp. (LTHM), Lithium Americas Corp. (LAC), Quantumscape Corp. (QS), and Piedmont Lithium (PLL).

In short, if you’re looking for opportunity in a crazed market, consider lithium trades.