by Ian Cooper
The lithium story is still red hot.
And it’s showing no signs of cooling off.
We already know about the heavy demand, the low supply, and the EV boom. But now, according to new forecasts, “the lithium market is expected to double by 2030 as soaring EV demand accelerates,” according to Electrek.co.
Ford is selling EVs as fast as they can make them, says CEO Jim Farley. Mercedes-Benz wants to go all-electric by 2030. General Motors just said it’s hitting an EV inflection point. Even Volkswagen, Toyota, and many other automakers are accelerating EV plans.
On top of that, the International Energy Agency (IEA) estimates we could see 135 million EVs in the next 10 years. Analysts at Ernst & Young say EV sales could outpace combustion engines in Europe, China, and the U.S. in the next 12 years.
There’s just one problem.
Unfortunately, we don’t have enough supply to meet demand. All of which is putting big pressure on lithium companies to find more supply.
It’s a big part of the reason you may want to consider loading up on lithium stocks, such as:
Albemarle (ALB)
With lithium demand only rising, we don’t expect for ALB to remain undervalued for long. Plus, the company recently raised its guidance twice. In May, for example, the company raised its forecast for the full-year, noting it expects for 2022 sales to come in between $5.8 billion and $6.2 billion. Adjusted EBITDA is now expected to come in between $2.2 billion and $2.5 billion, with adjusted EPS of between $9.25 and $12.25.
Livent Corp. (LTHM)
Another solid lithium stock to consider is Livent Corp., a pure play lithium producer. “We are becoming increasingly confident in the trajectory of lithium demand growth over the coming years,” Chief Executive Paul Graves said, as quoted by Reuters. All as the company restarts its expansions in the U.S. and in Argentina.
In addition, the company is moving forward with its lithium hydroxide project in North Carolina, and its carbonate expansion in Argentina. It will also start a phase two carbonate expansion in Argentina with commercial production expected to begin by 2023.
Earnings are impressive, too. For the first quarter of 2022, company revenues were up 17% quarter over quarter to $143.5 million. Year over year, that’s up 56%. GAAP net income was 609% higher quarter over quarter at $53.2 million.
Global X Lithium ETF (LIT)
One of my favorite ways to trade any hot sector is with an ETF, such as the Global X Lithium ETF. Not only does this ETF offer great diversification, it does so at less cost.
With an expense ratio of 0.75%, the LIT 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) to name a few.
Amplify Advanced Battery Metals and Materials ETF (BATT)
Another solid ETF to consider is the Amplify Advanced Battery Metals and Materials ETF.
With an expense ratio of 0.59%, BATT offers exposure to companies involved in battery storage, battery metals and materials, and electric vehicles. Some of its top holdings including Tesla, Glencore PLC, Nio Inc., Li Auto Inc., and LG Chemical to name a few.
Lithium Americas (LAC)
Construction activities at Lithium Americas Caucharí Olaroz remain on track to achieve first production by mid-2022 on the initial 40,000 tonnes per annum operation. At its Thacker Pass mine, results of a Feasibility Study on the first phase of Thacker Pass (for at least 30,000-35,000 tpa of lithium carbonate) are expected by year end.
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