The element lithium, which is a vital component of electric vehicle (EV) batteries, has become increasingly popular as countries push for cleaner energy sources. Moreover, because EV companies are investing to increase their production, the demand for lithium is rising. Consequently, lithium prices have recently skyrocketed. Therefore, we think fundamentally sound lithium stocks Albemarle Corp (NYSE:ALB), Livent Corp (NYSE:LTHM), and Lithium Americas (NYSE:LAC) could be solid buys now to take advantage of the rising prices. So, let's discuss.Lithium has become increasingly popular, given zero-emission initiatives worldwide and the growing electric vehicle (EV) market. Lithium is a key component used in electric vehicle (EV) batteries. The U.S. is narrowing the gap with China, which dominates the $46 billion lithium-ion battery industry, supported by President Biden’s emphasis on EV growth and significant investments by its automotive industry giants. Consulting firm AlixPartners expects companies to invest $330 billion globally in the EV supply chain over the next five years.
Lithium prices are skyrocketing, driven by heightened demand. The Mineral Intelligence index of lithium carbonate and hydroxide prices has more than doubled over the past year. In addition, the Global X Lithium & Battery Tech ETF (LIT) has gained 108.1% over the past year compared to the 32.4% gains of the broader SPDR S&P 500 ETF Trust (SPY) over the same period.
Hence, we think it could be wise to invest in fundamentally sound lithium stocks Albemarle Corporation (ALB), Livent Corporation (LTHM), and Lithium Americas Corp. (LAC) to take advantage of the rising prices.