The Rise Up Of Lithium Stocks and EVs
There has been so many lithium stocks that are trending in the market recently. This is happening as a result of the increasing popularity of electric vehicles in the consumer market. The first electric vehicle was built in 1890 by Pedro Salom, and named the Electrobat. It could run for 25 miles at 20 miles per hour. Electric vehicles now can go as far as many gas powered cars with high top speeds. In 2021, there are anticipated electric vehicles that could have a range of more than 500 miles. This is the reason that this has become such a huge industry. As a result electric vehicle stocks have grown in popularity on a mass scale in the last year. This includes 740% of gains for Tesla, and even more for Nio, the “Tesla of China”. This may have you begging the question, how is lithium involved with this sector?
Lithium’s Role With EVs
Lithium plays a very important role with electric vehicles. At the moment, most electric vehicles are using lithium ion batteries in their cars. This means that as the demand for lithium has increased with the popularity of electric vehicles over time. This has been especially apparent in the last year. There are many lithium stocks that have risen to popularity as a result of the electric vehicle growth. Some analysts have predicted that all cars on the road will be electric vehicles in the next few decades. Companies like Audi have vowed to have their entire vehicle lineup be electric by 2025 or other dates. This could continue to increase the demand for lithium as time goes on.
The Performance Of Lithium Stocks
In the last year, many lithium stocks have been able to massively uptick. Some lithium stocks have even gone up as much as three times their stock price one year ago. For example, Lithium Americas Corp. (NYSE: LAC) was at just $4.10 a share as of one year ago. Now on March 5th, 2021 this lithium stock is valued at $14.60 a share on average.
The volume that is being seen with lithium stocks is also very high at the moment. Most lithium stocks volume is higher than average. This is because lithium stocks are making gains or losses in multiple percentages every single day at the moment. Often when an EV company like Tesla has a big stock uptick, it can affect the lithium stocks that have contracts or are associated with the company. Tesla is just one example of the many electric vehicle stocks that are out there.
The Future Of Lithium Stocks
Lithium stocks are still in a volatile position despite all of the positives going for them. If a better battery technology is created as mentioned before, it could hurt lithium stocks. It is not likely that these batteries will become obsolete any time soon though. Lithium ion batteries are one of the most commonly used battery in electronics and electric vehicles. As our world becomes more tech based and digital it only helps lithium further its reign in the market. 10 years ago lithium stocks may have not even been a thought for investors looking for mining stocks to buy or sell. Now lithium stocks have become the fastest growing sector in terms of mining stocks in the last year. 2020 was a defining year for many electric vehicle stocks, and the momentum for lithium followed.
Is It Too Late To Invest In Lithium Stocks?
Some may think that the hype is over for lithium stocks. Sure, some lithium stocks are not at their all time high right now. But many lithium stocks often make multiple percentage gains (or losses) in a single trading day. These assets can be attractive to short term investors for this reason. These mining stocks can also be attractive to long term investors, as it seems like the demand for lithium is continuously moving upwards resulting in share price increases. So is it “too late” to invest in lithium stocks? That decision is up to the investor, but it seems like there is a lot of potential for lithium stocks in the market based on past market performance.
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How To Invest In Lithium Stocks
The last subject matter to discuss would be how to get invested into these mining stocks. There are a few precautionary steps that an investor can make before joining this sector, or any for that matter. These seem rather obvious on the surface but can often be overlooked even by seasoned investors. The first way to stay in the know when investing is with world news. World news that isn’t directly associated with the sector can often still have an effect on performance. Sector news is important as well. This could mean, for example, a sudden shortage of lithium that causes the price to move up.
Lastly in terms of news would be recent company news. This can be anything from corporate changes to financial reports. This is showing a lot right now as it is earnings season, and new reports are causing many lithium stocks to move up or down based on fourth quarter and full year performance. Positive financial results could potentially change the price of an asset significantly overnight. That is why keeping up with the latest that is happening with a company you may invest in is extremely important.
The volume of lithium stocks has been very high in the market lately. Multiple assets have a higher than average volume which is also important to look at. If the volume for a stock is high or low, it can suggest that it is moving up or down. A stock could move upwards with low volume, which is potentially a bad sign. These are all factors to be considered when looking to invest in lithium stocks, and can be applied to many other sectors as well.
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