Lithium stocks are on fire on wall street. Last week, we witnessed a massive jump in lithium stock prices with a double-digit increase.
Multiple industry sources are confident that demand for lithium carbonate and lithium hydroxide will rise over time.
Livent beat Wall Street on Q2 results. Earnings grew 825%, and revenues stood at 114% higher yearly. Livent says it will be able to produce 10,000 metric tons of lithium carbonate by the end of 2022 through the first expansion in Argentina. The company will also start supplying lithium to General Motors (GM) in 2025.
Albemarle’s share price has increased by 52.8% in the last six months against a 1.1% growth in the industry.
Many success stories are unfolding for lithium stocks on the street recently.
Why are the Lithium Stocks Rising?
The short answer is a growing demand for lithium in the lithium battery industry and supportive government policies such as the recently released Inflation Reduction Act to boost EV sales. Experts forecast that the global lithium demand will increase by more than 50% in the next decade.
The battery manufacturers are investing much effort and money into R&D for lithium silicon battery commercialization.
Companies are introducing new technology to smoothen the complex process of developing silicon material for graphite anodes. Lithium silicon anode batteries are considered the future due to their durability and performance.
The main reason for this increase in demand is the adoption of electric vehicles. The rising popularity of electric cars has led to a massive increase in demand for lithium – the main component of lithium-ion batteries.
The wide range of usage of lithium across various industries, from smartphones, laptops, and smart-home devices to electric vehicles, makes it more demanding.
The rising demand and supply shortage and Tesla’s new $10 billion lithium battery factory are attributed to the increasing lithium stock prices.
Tesla’s $10 billion Gigafactory in Nevada is expected to produce 35 GWh of cells and 50 GWh lithium-ion battery packs yearly to match the estimated production of 500,000 electric cars. This factory is bigger than the sum of all lithium companies worldwide.
Tesla’s lithium-ion battery production at this Gigafactory is expected to increase the global lithium supply by 17%. This enormous increase in production will help the price of lithium to cool down to a greater extent.
Elon Musk said at a conference that the Gigafactory would be operated cost-effectively so that they can make Tesla cars more affordable.
Supply Shortage and the Rise of the Dark Side
The rise of the Dark Side of lithium is another reason behind the recent surge in the market value of these stocks.
A supply shortage of lithium is also one of the reasons behind the recent surge in the market value of these stocks.
The global supply of lithium is expected to fall short of the demand from the growing use of lithium in batteries, electric vehicles, and other industries. This is because the mines that produce lithium are drying up. Many of the major lithium mines are in South America.
At present, Chile is the only major producer of. Chile’s lithium mining industry currently produces 40,000 tonnes of lithium each year. The demand for lithium is expected to rise to 220,000 tonnes each year.
The tremendous growth prospect in Lithium batteries
The higher energy density and specific energy of LIBs make them an obvious choice in all markets and applications.
The report: Lithium Silicon Battery Market released by MarketsandMarkets.com estimates that the global lithium silicon battery market will grow to USD 247 million by 2030 from USD 10 million in 2022, at a CAGR of nearly 49%.
Growing demand for efficient and long-lasting lithium-based batteries opens up business opportunities for the Li-ion battery manufacturer to produce more power grids, battery packs and power charging stations to meet the market demand.
These batteries are perfect for energy-heavy applications, such as EVs and material-handling equipment. Numerous industrial systems, aircraft, marines, and robots that require long-lasting power will use Lithium batteries extensively.
With the emerging markets of portable electronics and electric vehicles, demand for advanced lithium-ion batteries is growing.
The global lithium market is projected to grow at an annual rate of 8% over the next few years, reaching $6.62 billion by 2028, with solid demand for electric vehicles (EVs) and other renewable energy applications.
The increasing demand for rechargeable lithium batteries drives the meteoric rise of lithium stocks. Around 100 different types of lithium-based batteries can be used in various applications. The companies will continue investing money into research and development of new technologies. Lithium silicon anode batteries have the potential to revolutionize the battery market, which is why investors are so bullish on this commodity.
The potential growth in the demand for lithium will continue to drive the prices up in the future. The growing demand for lithium in batteries is a major driving force behind the recent surge in the prices of lithium stocks. With increasing demand, lithium prices will continue to rise in the long term. The value of lithium-based stocks is likely to increase significantly over the next few years.