- The correction in the lithium ETF may be an opportunity for long-term believers in the electrification of automobiles.
- Fundamentals are excellent as demand could double over the next 3-5 years for lithium ion batteries.
- In addition to electric cars, lithium ion batteries power our smartphones, tablets, laptops and smart grids.
- Tesla's announcement to build a factory in the Western US could be game changer for the lithium and graphite sectors.
- Lithium and Graphite miners, manufacturers and producers could rise in value exponentially.
Despite the lithium sector being in a correction for six weeks, attention should be paid to this dynamic sector which may be just on the verge of breaking out higher. For years I alerted you ahead of the general public about the potential growth in the lithium-ion battery market needed for electric vehicles, grid storage and mobile electronics. From the chart above notice the huge volume which came in early March after the Tesla announcement. It has pulled back since that run which may provide long-term investors with a more prudent entry point. As you can see below Tesla is building electric vehicles which could compete against some of the top luxury cars.
I was way ahead of my time forecasting the rebound in lithium and graphite miners as they are both critical materials for lithium-ion batteries needed in electric vehicles. Demand for these batteries could double over the next five years. I have remained bullish and have been waiting for a significant catalyst to turn this sector.
Investors should consider a long-term investment in the Lithium ETF (LIT) which holds a wide array of lithium battery manufacturers and producers. It is trading a relatively low PE of 19 yet the sector may be poised for amazing growth over the next 3-5 years as demand doubles. Market share for hybrids and pure electric cars may be on the rise.