1 Sector to Watch as the EV Market Heats Up
The lithium rush is on. As a key element in the transition from fossil fuel dependence to renewable energy, the soft, silver-white metal is essential for batteries for electric vehicles and utility-scale renewable projects. As that demand accelerates, lithium miners stand to benefit – but only if they can gear up production fast enough to meet demand.
Lithium prices rose strongly during 2021 – up anywhere from 250% to more than 400%, depending on the form of lithium, between the start of the year and mid-December.
Prior to the pandemic, lithium prices slumped amid a supply glut and slowing demand growth as China reduced its electric vehicle subsidies. The contraction in the global economy because of COVID-19 brought prices even lower. As demand reemerged, companies sold off excess lithium, keeping prices low. With the low prices, companies cut production and eventually began rebuilding their stocks, heping prices rebound as demand recovers from the pandemic.
Source Fool.com
