Growing environmental awareness and a regulatory push for clean energy continue to accelerate adoption of electric vehicles (EVs) and alternative sources of energy. As a result, the market for battery storage has seen exponential growth in recent years. One of the direct consequences of the rechargeable battery trend is the demand spurt for lithium. A key component of rechargeable batteries, lithium is crucial for the production and proliferation of EVs, smartphone batteries, and battery storage packs that both supplement and substitute conventional grid-connected energy.
The global lithium-ion battery market is poised to top US$70 billion by 2025, growing 15% annually. Much of the demand is fueled by what appears to be just the beginning of the EV revolution. As battery-powered cars, longer-lasting smartphones batteries, and stationary storage gain traction, demand for lithium is expected to continue to grow steadily.
Leading lithium producers are well-positioned to reap a windfall of growth and profitability from these trends. At their current valuations, far below their fair value, it’s hard to ignore their upside potential and their attractiveness as long-term investment bets, according to Morningstar equity research.
