Is This The Best Way To Profit From The Electric Car Boom? (SPONSORED POST)

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.


As Tesla (TSLA) fires up its US$5-billion battery gigafactory to mass produce lithium-ion batteries in a historical turning point, lithium prices are set to explode, there has never been a better year to be a lithium company.

Tesla began mass production of lithium-ion batteries in the first week of January 2017, and by the end of the year it will have led to a doubling of global battery production capacity. By 2018, Tesla predicts it will churn out 35 gigawatts of batteries per year. It’s a massive amount that surpasses more than what the rest of the world combined produces.

To put it more succinctly, Tesla’s Nevada Gigafactory alone will lead to a doubling of global battery production capacity next year already—and with such limited supply availability it means a bull run for lithium. If lithium grows at its expected rate of 16 percent annually, it will be the fastest-growing commodity of the century--and junior lithium companies may turn out to be the fastest-growing companies of the century.

Lithium X Energy Corp. (TSX.V: LIX) (OTCQB: LIXXF) is a small-cap lithium company with a large resource (> 1 million tonnes LCE) and a dream team that has stormed the new supply scene in a way that would have been unthinkable just a couple of years ago.

Not only does the company have a world-class lithium resource in one of the sweetest lithium spots in the world, but it also has a world class technical and financial team with a strategic vision that has the potential to turn this into a billion-dollar company.

Here’s why:

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Lithium stocks continue to rise, and analysts view 2017 as the strongest lithium rise yet because of Tesla’s Model 3 demand. The demand is not even in question: Tesla’s already got some 370,000 reservations and is looking to deliver 100,000 before the end of the year. It’s more a question of supply meeting demand at this point.

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Joe Economy 2 years ago Member's comment

The opposing view would suggest that as more electric cars are produced, economies of scale will enable cost savings in the production of electric car batteries leading to lower costs to the consumer. This might lead to lithium prices to also come down. Also, lithium is only a small component of an entire lithium ion car battery. Researchers at Carnegie Mellon University did a study that manipulated the price of lithium carbonate (raw lithium ore), using a base price of $7.50/kg. Starting at a price of $0 and increasing it to $25/kg (an increase of 233%) only changed the cost of batteries by less than 10%. So I am skeptical of a Tesla/lithium stock correlation and the argument for investing in lithium stocks based on Tesla's growth is not definitive in my opinion.

Gary Anderson 2 years ago Contributor's comment

That could well be true, Joe. I am seeing a backlash against electric cars, though. People just don't like them.

Barry Hochhauser 2 years ago Member's comment

I'm been investing big in the #ElectricCar boom myself. $LIXXF $TSLA

Sensible Cents 2 years ago Member's comment

Looks promising, thanks.

Dale DeRoy 2 years ago Member's comment

#Lithium looks like a good investment to me right now. Any other stocks you'd recommend besides $LIXXF?

Gary Tanashian 2 years ago Contributor's comment

I dummy-proofed the Lithium trade by buying the Global-X fund LIT. But that is far from a pure play on Lithium, and so I'd like to explore some individual suppliers.

Carl Schwartz 2 years ago Member's comment

I find these #lithium companies to be ripe with opportunity.

Stock Mistress 2 years ago Member's comment

Is there any reason why NOT to $LIXXF? Or any companies which look even more promising in this space?

Gary Anderson 2 years ago Contributor's comment

So, why would an industry, the electric car industry, hitch its wagon to a commodity that is so scarce? How will that impact the price of electric cars in the future? Perhaps the author can write an article showing us the impact of this commodity on electric car prices in the future. And Cobalt is even more scarce than Lithium. Battery prices are coming down, but with scarcity of the main ingredients, they could rise in price later on.

Gary Tanashian 2 years ago Contributor's comment

Good points, Gary.