Most electric cars are powered by lithium-ion batteries. Driven by surging demand for electric vehicle batteries, lithium prices have more than doubled in 2021. 2022 will further define the exaggerating thrush for lithium as EVs production keeps on rising. Lithium battery stocks hold a massive potential as the EV industry has yet to reflect the synergic effect on lithium stocks.
Benchmark Mineral Intelligence, a lithium-focused research firm, expects a deficit of lithium in 2022. And IHS Markit, another research provider, expects the market to more than double between 2021 and 2025. However, the lithium industry is inherently cyclical and subject to boom-and-bust cycles.
Lithium is among the new emerging markets and it equally is risky considering the supply side of it. Yet, Lithium stocks hold massive upside as the potential investors could go bananas anytime in the future.
Lithium Americas Corp. (LAC)
Canadian company Lithium Americas Corporation (LAC) is a leading lithium mining firm. The company has mining projects in Jujuy, Argentina, and Thacker Pass in Nevada, USA.
In a bid to grow market share, LAC acquired Millennial Lithium in late 2021. The company acquired the developer of a lithium mine in Argentina for $400 million. This acquisition will reinforce Lithium America’s growth pipeline. This will also provide a compelling growth opportunity close to its Cauchari-Olaroz lithium brine project in Argentina.
The Cauchari-Olaroz mine is set to commence production by mid-2022, with operating costs estimated below $3,600 per ton. The permitting process associated with the Thacker Pass project is on track, with a final decision expected by the first quarter of 2022.
LAC’s increased strategic interest in Arena Minerals also strengthened long-term resource development plans in Argentina. LAC is yet to generate any revenue. However, considering its 2022 plans and long-term potential, it would be wise to keep an eye on the stock.
As of September 30, 2021, the company has $482 million in cash and cash equivalents. LAC stock has massive potential in the list of lithium battery stocks and once it starts reporting revenue growth, things will be different.
Standard Lithium (SLI)
Standard Lithium (SLI) is an innovative technology and lithium development company. SLI’s flagship project is located in southern Arkansas, where it is engaged in the testing and proving of the commercial viability of lithium extraction from over 150,000 acres.
The company has commissioned its first-of-a-kind industrial-scale direct lithium extraction demonstration plant at Lanxess’s south plant facility in southern Arkansas. The demonstration plant utilizes SLI’s proprietary LiSTR technology to selectively extract lithium from Lanxess’s tail brine.
Standard Lithium is also pursuing the resource development of over 30,000 acres of separate brine leases located in southwest Arkansas. SLI stock is trading below -10% year-to-date. If the company announces some key outcomes in the next few months, SLI could soar again. It’s one of the best lithium battery stock to watch this year.
Sociedad Química (SQM)
Sociedad Química (SQM) is one of the most charming lithium stocks on the market. The company has solid fundamentals and looks promising in the long term.
When we talk about lithium stocks, SQM is always in the race of the best lithium stocks out there. Sociedad has around 20% market share.
SQM hails from Chile and has some of the best lithium deposits in South America. Its access to brine deposits in the salt flats of the Atacama Desert is a key advantage due to low lithium manufacturing costs. Besides lithium, SQM produces fertilizer, iodine, potassium, and industrial chemicals. With about $2 billion in revenues, the company has strong profit margins and pays a dividend.
SQM will be looking to display strength as it nears its next earnings release. The most recent consensus estimate is calling for quarterly revenue of $933.32 million, up 81.65% from the year-ago period.
SQM has minimal risk in the industry with plenty of cash to fund expansion and having minimum debt. SQM is definitely a lithium battery stock to keep in your buying books.
Pilbara Minerals (PILBF)
Pilbara Minerals (PILBF) is an emerging lithium and tantalum producer focused on the development of its world-class 100% owned Pilgangoora Lithium-Tantalum project. The company is well-positioned to become a low-cost, long-term, sustainable lithium producer.
The last 12 months have been very strong for the Pilbara Minerals’ share price. In 2021 the shares of the lithium miner rose by more than 210%. Pilbara has benefited from a strong increase in the lithium price and demand is expected to continue to rise over the coming years.
According to Pilbara Minerals, the lithium market conditions remain very strong, with high demand and constrained supply. It is leading to record product pricing, which is still trending higher.
As the lithium prices will continue to remain strong into 2022, this will help the company’s earnings. Earnings will be stronger in the next few years thanks to that strong commodity price. PILBF is a great lithium battery stock and this year could be a great investment opportunity.
Livent Corporation (LTHM)
Livent (LTHM) is another leading lithium company that we covered in our previous video. This leading lithium producer is a seller to EV original equipment manufacturers and battery makers worldwide. Livent has been extracting Lithium Brine at Salar del Hombre Muerto in Argentina for more than 20 years.
Livent has a competitive edge due to low-cost resources for lithium carbonate. The company has a current production capacity of around 20,000 metric tons of lithium carbonate, which is expected to double by the fourth quarter of 2023.
Livent is currently producing qualified battery-grade lithium hydroxide in the United States and China. It is with a combined capacity of nearly 25,000 tons. Livent remains on track with near-term capacity expansions and a 5,000 metric ton hydroxide addition in Bessemer City.
LTHM expects strong demand and high lithium pricing to buoy its prospects through 2022. The company had cash and cash equivalents of $195.3 million, as of Sep 30, 2021. LTHM stock would be a solid investment option in the list of lithium battery stocks.