Lithium stocks are racing ahead like a Duracell bunny, with the market worth a whopping $7.5 billion (about £5.9 billion) and forecast to grow 12% a year for the rest of this decade.
Each electric vehicle (EV) needs around 8kg of lithium to drive on rechargeable batteries. Multiply that by the 145 million EVs predicted to be on the road by 2030, and, well, that’s a whole lot of lithium.
Finding the best lithium stocks can be almost as hard as trying to mine the material itself. There’s no way to know which companies will see long-term success.
To give you a starting point, here are the top constituents in the Stoxx Global Lithium Miners and Producers Index, which is the industry benchmark followed by popular exchange-traded funds (ETFs) like the iShares Lithium Miners and Producers ETF.
| Icon | Stock | 1 year performance (January 2024) | 5 year performance (January 2024) | Link to invest |
|---|---|---|---|---|
 | Cosmo Advanced Materials & Technology (005070) | 170.86% | 837.53% | Invest with XTBCapital at risk |
 | SK IE Technology (361610) | 49.02% | -40.71% | Invest with XTBCapital at risk |
 | Liontown Resources (LTR) | 20.83% | 7,875.00% | Invest with XTBCapital at risk |
 | Sigma Lithium (SGML) | 16.59% | 1,910.74% | Invest with XTBCapital at risk |
 | Pilbara Minerals (PLS) | 3.76% | 493.85% | Invest with XTBCapital at risk |
 | Allkem (AKE) | -13.39% | 205.28% | Invest with XTBCapital at risk |
 | Livent (LTHM) | -15.42% | +15.78% | Invest with XTBCapital at risk |
 | Sociedad Quimica Y Minera De Chile (SQM) | -30.37% | 1.20% | Invest with XTBCapital at risk |
 | Tianqi Lithium Industries (002466) | -34.39% | 119.02% | Invest with XTBCapital at risk |
 | Albemarle (ALB) | -37.30% | 83.87% | Invest with XTBCapital at risk |
Lithium is an increasingly popular commodity. It’s a lightweight, highly reactive metal used primarily in rechargeable batteries for electronics and electric vehicles (EVs).
The companies involved in the metal’s supply chain are global and involve everything from junior mining stocks (like exploration companies) looking for the metal in the ground to high-tech firms investigating its applications in cutting-edge technology.
Compare share dealing accounts to find the right platform for you. Make sure to use a platform with access to international markets or a large ETF selection if you want to invest in top lithium stocks from around the world.
Lithium stocks are sparking investor interest due to the metal’s role in a host of green technologies and some of the main benefits of investing in lithium includes:
But before you start loading up your portfolio with this “white gold”, it’s essential to explore the risks.
Lithium may be the first metal on everyone’s lips when it comes to green tech, but there are some downsides to consider if you’re thinking about investing:
We're already seeing plenty of rising demand for lithium in various industries, and this pumping demand is leading to higher prices as the supply of lithium gets squeezed. However, as demand for lithium grows, there's likely to be more efficient and cheaper ways to obtain the material - possibly even better tech for recycling it.
If lithium demand continues on its current trajectory, it's likely to be an exciting space for all the stocks involved. But, the key dangers to the sector (like new technology and the use of alternative materials) could mean that money moves elsewhere over time. Especially, if investors feel uncomfortable putting money into unstable regions where lithium is located and mined.
Investing in lithium doesn’t just mean buying stocks in individual mining and exploration companies.
If you don’t fancy picking between top lithium stocks, you can invest in all of them at once (and lots of others) by investing in ETFs like the following examples:
All of which contain some of the biggest and best global lithium stocks around. ETFs can offer diversified exposure to a range of companies within the lithium industry. This can include miners, battery manufacturers and tech stocks that are heavily linked with lithium – like Tesla (TSLA) for example.
Another option is investing in lithium recycling companies, which is becoming more popular as the need for sustainable lithium sourcing grows. These companies focus on recovering lithium from used batteries.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
With the lithium market speeding faster than a Tesla on launch mode, and an anticipated explosion in EVs and energy storage needs – lithium stocks are hot property. Whether you’re into high-tech innovators or down-to-earth miners, there are more than a few ways to invest.
Just remember while riding the lithium buzz to keep an eye on the horizon for emerging technologies and geopolitical ripples that could lead to a powering down of some of these stocks.
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