4 juicy lithium stocks for me to consider buying now

Like a kid in a candy store, sometimes having too many choices can be a problem. However, reviewing various potential investment opportunities gives you options to benchmark against. From that, I can decide where is the best place to invest.

While reviewing lithium stocks is a growing area, there are options I like.

Skipping straight to the end

The first two options I’m thinking about are connected to lithium through the end product – in this case, electric vehicles. Tesla and NIO are the two biggest players in this area. Lithium is needed as a key element that makes car batteries.

Tesla is in the process of negotiating with the authorities in Texas to have a lithium refinery built in the state. This will make it easier for businesses to control supply chains and prices. After all, since the beginning of 2020, the price of lithium has increased 10x higher. Any ability to cut out the middle man adds additional margin will help save costs.

For Tesla and NIO, stock price movements will not be dictated by lithium prices. But I don’t see this as a bad thing. It will be one of the few factors that affect the stock price, which I feel affords me some safety.

It starts at the beginning

Another direct exposure to lithium can be found through mining stocks. The two specific ones I found were Ganfeng Lithium and Lithium Tianqi District. Both companies are based in China and are registered locally or in Hong Kong.

Immediately, this is a potential problem. I can buy shares, but a quick scan shows that not all investment providers have access. Unlike small companies (Ganfeng has a market cap of over $22bn), but Asian stock markets are not easily accessible for UK retail investors like myself.

Put that one, two businesses excite me. Tianqi shares are up 17% in one year and 83% in five years. This mining stock buys and operates projects around the world. For example, Tianqi has a 51% stake in the world’s largest lithium mine in Australia. If we see continued demand in the coming years, these types of companies are essential to the entire process. So, I think investors will want to gain exposure through the stock market.

Have a finger in many pies

These companies only describe two types of lithium stocks, one in the initial stage and the other in the end-use stage. I know there are many other companies in this space that warrant potential investment as well.

On that basis, I think I will invest a little in all four companies soon. I want to save some more free cash so that in the coming months I can hopefully identify more stocks to buy from this area.