The Global X Lithium (NYSE:LIT) will have a major tailwind in coming years from a wave of electric car adoption that now includes a major Indian government mandate.
As the World Economic Forum reports, India has taken an unprecedented step of outlawing the sale of non-electric vehicles within the next 13 years:
Every car sold in India from 2030 will be electric, under new government plans that have delighted environmentalists and dismayed the oil industry.
It’s hoped that by ridding India’s roads of petrol and diesel cars in the years ahead, the country will be able to reduce the harmful levels of air pollution that contribute to a staggering 1.2 million deaths per year.
The switch will also help sway India’s trade balance. The Asian country has surged to become the world’s third largest oil importer, buying about $150 billion of crude every year. Analysts believe the move will save the nation around $60 billion in energy costs each year.
While oil will no doubt suffer the negative effects of the giant emerging market’s move away from fossil fuel, other forms of energy will benefit. Lithium, for example, which is required for all modern electric car batteries, will be in higher and higher demand.
ETF investors can ride the wave via the Global X Lithium ETF, which closed at $30.02 on Friday, up $0.14 (+0.47%). Year-to-date, LIT has gained 23.13%, versus a 9.23% rise in the benchmark S&P 500 index during the same period.
LIT currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #8 of 127 ETFs in the Commodity ETFs category.