Three Cheap Ways to Trade the Lithium Boom in 2023

Jan 20, 2023

Lithium stocks could see higher highs in 2023.

For one, demand is set to accelerate on the transition from fossil fuels.

In fact, according to USA Today, electric vehicles make up about 5% on new auto sales.  By 2030, President Biden wants that number to be as high as 50%. While analysts at S&P Global Mobility don’t see 50% by 2030, they do project for EVs to make up about 8% of the market this year, 15% by 2025, and 37% by the time 2030 rolls around. Better, California and other states are aggressively moving to phase out gas-powered cars, which should fuel momentum.

Two, Tesla’s price cuts are bullish for lithium prices.  Lower prices, coupled with U.S. tax credits for electric vehicles could send prices rocketing higher, as well.  Three, the Inflation Reduction Act of 2022 is expected to kickstart the renewable energy boom.  

Four, lithium prices should see strong support in 2023, “with supply expected to remain tight amid bullish demand from the accelerating adoption of electric vehicles across the globe, though some price correction could be expected, led by a slowdown in the Chinese market, market participants told S&P Global. With EV adoption picking up, some industry experts predict the gap between lithium demand and supply will remain or even widen in 2023.”

Even better, a good number of lithium stocks are cheap on recent pullbacks.

Look at Albemarle (ALB), for example.

After dropping from about $330 to $210, it’s starting to show big signs of life.  It’s now back up to $247.96, and we believe it could test $280 again soon. Helping, the company will host an investor event on January 24, where it will review strategy, its outlook, and 2023 guidance. Deutsche Bank analyst David Begleiter believes that even will be bullish for the stock.

Or, look at American Lithium (AMLI) – which just moved to the NASDAQ.  With that move, Simon Clarke, CEO of American Lithium stated, “We are confident this listing will elevate American Lithium’s profile in the United States capital markets by providing greater visibility and exposure to a broader institutional and retail investor base.”

There’s also Lithium Americas (LAC), which is just starting to pivot higher.

With LAC, a Federal Court reaffirmed no additional hearings or briefings are required and expects to issue a decision in the next couple months. 

The early January 2023 “hearing provided an opportunity to reaffirm our confidence that the permitting process for Thacker Pass was conducted thoroughly and responsibly,” commented Jonathan Evans, President and CEO. “As we continue to prepare for construction, we look to finalize key supply agreements and partnerships that can help to secure America’s clean energy future by providing responsible and domestically produced lithium.”

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