How and Why to Invest in Lithium Stock

Lithium and Lithium Battery

Lithium demand and supply. Click picture to see it better.
Lithium demand and supply. Click picture to see it better.
Price of lithium carbonate. Click picture to see big picture.
Price of lithium carbonate. Click picture to see big picture. | Source
Tesla Gigafactory.
Tesla Gigafactory. | Source
Tesla gigafactory.
Tesla gigafactory. | Source
March 10, 2014 News: Rolls Royce Planning a Plug-In hybrid. Rolls Royce is now said to be working on a plug-in hybrid that would countermand some of the shortcomings, like recharging times and range – that killed the 102EX.
March 10, 2014 News: Rolls Royce Planning a Plug-In hybrid. Rolls Royce is now said to be working on a plug-in hybrid that would countermand some of the shortcomings, like recharging times and range – that killed the 102EX. | Source
Pieces of lithium metal.
Pieces of lithium metal. | Source
Lithium battery from article called The Future for Lithium is Now.
Lithium battery from article called The Future for Lithium is Now. | Source

Invest in Lithium

Lithium is used to make the lithium-ion batteries that are in electric vehicles (EVs) or electric cars. Electric cars do not need any gasoline, only electricity. Electricity can be created with solar panels or wind turbines so all you need is sunlight or wind.

July 28, 2016 Latest News

It has taken some time especially with Tesla Gigafactory but in the Spring of 2016 Tesla got an order of 400,000 model 3 cars ($1,000 deposit) each selling at $35,000 each. Other car companies are trying to build electric cars. Tesla is trying to buy SolarCity.

Tesla will be putting at least $5 billion into the gigafactory but Panasonic is putting $1.6 billion into it. From Los Angeles Times:

Called Gigafactory 1, the massive operation, still under construction, aims to create enough car batteries to turn out 500,000 Teslas in 2018.

Panasonic is gambling $1.6 billion to make battery cells from raw material at Gigafactory 1 and push them onto Tesla assembly lines, where they’ll be packaged into battery modules for electric vehicles.

The Economist (from January 2016) in picture says:

With demand for such high-density energy storage set to surge as vehicles become greener and electricity becomes cleaner, Goldman Sachs, an investment bank, calls lithium “the new gasoline”.

SQM is part of a global scramble to secure supplies of lithium by the world’s largest battery producers, and by end-users such as carmakers. That has made it the world’s hottest commodity. The price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December, to $13,000 a tonne (see chart 2).

The industry is fairly concentrated, which adds to the worry. Last year Albermarle, the world’s biggest lithium producer, bought Rockwood, owner of Chile’s second-biggest lithium deposit. It and three other companies—SQM, FMC of America and Tianqi—account for most of the world supply of lithium salts, according to Citigroup, a bank.

May 17, 2015 Latest News

Tesla is currently building their gigafactory to make batteries for Tesla cars. They just announced April 30th 2015 that Tesla has a new product! It is a battery to store electricity in homes that make electricity from solar cells. Their sister company SolarCity installs solar cells on the roofs of people's houses. It is owned by the cousins of Elon Musk (CEO of Tesla). He is also chairman of the board of SolarCity.

This gigafactory or giga-factory was going to be the biggest in the world making most of the lithium-ion batteries in the world. Now other companies including car companies are planning on building their own gigafactories so they will not need to depend on Tesla for their battery needs. It is hard to compete with Tesla if you are buying your batteries from Tesla.

SolarCity is the largest company doing the above. Currently there are 150 Walmarts that have or are in the process of getting solar cells on their roofs from SolarCity so they can produce their own electricity instead of buying it.

Homes can buy the solar cells from SolarCity or just pay for the electricity from it at a much lower price! If you own your home, contact SolarCity, to see if you should get your electricity from the sun instead of paying more to get it from burning fossil fuels that will someday be gone. End of Update!

Wikipedia says:

Lithium-ion batteries are common in consumer electronics. They are one of the most popular types of rechargeable batteries for portable electronics, with a high energy density, no memory effect, and only a slow loss of charge when not in use. Beyond consumer electronics, LIBs are also growing in popularity for military, battery electric vehicle and aerospace applications.[6] For example, lithium-ion batteries are becoming a common replacement for the lead acid batteries that have been used historically for golf carts and utility vehicles. [As far as aerospace, Elon Musk is also CEO of SpaceX]

This article was written on March 5, 2014. On the right under the pictures is an article from Zen Trader. A kilogram is 2.2 pounds. It says:

As mentioned above, a primary “driver” in the demand equation for lithium for the foreseeable future, will be its increasing use by the auto industry in batteries, for the production of hybrid, plug-in hybrid, and electric vehicles.

The amount of lithium required for use in the construction of each EV [electric vehicle] runs from 6 – 24 kilograms [13 to 53 pounds], depending upon the size and kind of vehicle being built. To cite one specific example of demand ramp-up, in late 2010, General Electric (GE) announced that it intends to buy 25,000 electric vehicles within the next 5 years, converting approximately half of its company car fleet to EVs in the process.

The battery in the Tesla model S weighs over 1,000 pounds so it can go over 250 miles on a single charge. There is a March 3, 2014 article called Toyota's Lithium-Based Future. It says:

The Nikkei Business Daily stated that Toyota Motor Corporation was planning to increase production of lithium-ion batteries by six (6) times.

Toyota's recent chain of announcements indicates a long-term industry shift to lithium-based automobiles.

What motivated me to write this article is what is happening with the Tesla electric car company. They have showed the world that an electric vehicle can be the best overall car or automobile. Consumer Reports chose the Tesla Model S car as the best overall car for 2014.

It rates cars on a scale of 0 to 100 and the Tesla model S got a rating of 99. Tesla Motors is doing very well and building many cars. They know that the production of lithium-ion batteries will not be able to keep up with them so they are building a giga-factory to make lithium-ion batteries.

You can also invest in Tesla since it is only a matter of time until they become the largest car manufacturer in the world. Besides selling automobiles in the U.S., they are now selling them in Europe and China. For more on investing in Tesla see Tesla Motors: The Moral Man's Victory for the Health of the Planet. Also for even more on this see Now is a Great Time to Invest in Tesla Stock.

The Best Way to Invest in Lithium

There are articles telling about how one way that you can take advantage of this giga-factory being built is by investing in 4 different stocks. The biggest producer of lithium is Chemical & Mining Co. of Chile (Sociedad Quimica y Minera de Chile). It trades as SQM on the NYSE.

The second biggest producer of lithium is FMC Corporation (FMC). It is in America with its headquarters in Philadelphia, Pennsylvania. The third largest producer of lithium is Rockwood Holdings (ROC)(bought by Albemarle Corp). It is an American company with its headquarters in Princeton, NJ.

The article that I was looking at then suggested an ETF that can be bought and sold just like a stock. Wikipedia says:

An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day.

ETFs have increased in popularity with investors to the point that over 1,200 are now available. The ETF that was listed was Global X Lithium ETF (NYSE: LIT). This company has about half of its assets in lithium producers. The 3 listed above is where it has the biggest amounts of its total holdings. It has about 6% of its money in Panasonic. They currently supply Tesla with its battery packs. They are also considering investing a billion dollars into Tesla's giga-factory.

As of July 28, 2016 here are the top 10 holdings of LIT:

1. 19.5% of assets in FMC Corporation

2. 10.6% in SQM

3. 7.8% in Orocobre Ltd

4. 6% in Albemarle Corp

5. 5% of Galaxy Resources Ltd

6. 5% in Saft Groupe SA

7. 3.8% of Johnson Controls Inc

8. 3.7% of Samsung SDI Co Ltd

9. 3.7% of Tesla Motors Inc

The LIT (Global X Lithium) Overview page says:

An essential component in the advancement of alternative energy is the ability to efficiently store power. Renewable energy sources such as solar and wind require generated electricity to be stored because they provide power inconsistently throughout the day. Overhauling the transportation industry to run on electricity, rather than gasoline, requires enough energy storage to power vehicles for hundreds of miles. To meet these energy storage demands, advanced batteries are made from Lithium. The Global X Lithium ETF is a diversified option to invest in the ‘full lithium cycle’, from mining and refining the metal, through battery production. This gives investors more direct exposure to lithium prices, with additional diversification across lithium miners and battery producers.

Caution: It appears that some of these lithium mines are scams. They tell you all of these great things about them and they do not even exist. A penny stock can be any stock that is around $5 or less. It is very rare for a penny stock to go anywhere. Tesla was never a penny stock. It started out at $17 a share.

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Tesla and the new highs of lithium

The growing demand for lithium

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Comments 3 comments

tirelesstraveler profile image

tirelesstraveler 2 years ago from California

Reasonable suggestion with many facts to support. Nice job.


Daniele 23 months ago

As an electrical enigneer, I love electric cars but I don't think it's the right answer. It may become part of the answer in the long run but I am against the mass promotion of electric or fuel cell vehicles.Think of it this way, the concept of using electric vehicles is to generate energy centrally from clean sources and to store the energy chemically for use in vehicles for transportation. The concept of using a hydrogen fuel cell car is to generate energy centrally from clean sources and to store the energy chemically for use in vehicles for transportation. The current concept of gasoline cars is to refine chemically stored energy collected by nature over millions of years and to use this chemically stored energy in vehicles for transportation. The only difference is that we are just finding the fossil fuels instead of making them.It's a bit counter-intuitive for most people but hydrocarbon fuels such as gasoline and diesel are no different than hydrogen and batteries except that gasoline and diesel have much higher volumetric energy densities and we already have the infrastructure and vehicles to use them. Also, just as we can make hydrogen from H2O, we can make gasoline from CO2 and H2O. Sandia National Labs has done this, they were researching more efficient ways to produce hydrogen from H2O and concluded that it made more sense to continue the process and synthesize liquid hydrocarbon fuels for use in existing infrastructure and vehicles.There's already 1 billion gas and diesel powered vehicles out there. If we wanted to benefit the environment, we would be simply changing how we make gasoline and diesel such that they become sustainable and perhaps even carbon negative. Promoting electric and fuel cell vehicles are just a matter of increasing consumerism so that manufacturers can sustain a growth rate that's higher than what's justified by population growth and end of life replacement alone. Indeed an artificially inflated economic growth rate has been sustained via designed obsolescence such as model years, and tail fins. There's probably more of an economic boost from electric and hydrogen vehicles but this is at the cost of increased consumerism and hence increased environmental impact.Hopefully there will be more electric vehicles in the future but there's no need to switch en masse to them. We already have a very good battery called gasoline and diesel, we just need to produce them from clean energy sources instead of drilling for them.


Chuck Bluestein profile image

Chuck Bluestein 23 months ago from Morristown, AZ, USA Author

Tesla has charging stations that charge the car battery with electricity. They produce this electricity from solar cells that get its power from sunlight. The CEO of Tesla, Elon Musk, became a billionaire from selling PayPal. Then he gave up his interest in money since a billion dollars is enough to last many lifetimes. His interest now is the world living on sustainable energy.

For example his battery factory will be powered by solar cells and wind towers to get energy from the sun and wind. Everyday we are burning up millions of years of stored sunlight. When these resources are used up, they will be gone. Elon Musk is a billionaire genius with a photographic memory. He is also a rocket scientist.

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