Owning the best lithium battery stock is the simple way to profit off the whole electric vehicle industry without having to guess which EV car company will win out.
The rise of electric vehicle stocks might have you thinking about names like Tesla Inc. (NASDAQ: TSLA) or Nio Inc. (NYSE: NIO) for profits. While these have delivered significant growth for investors over the last couple years, their best gains might be in the rearview.
Flashy, new, innovative companies can only carry the hype so far. Soon, we will witness legacy automakers like Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE: TM) offering their own better, more studied EV solutions.
Basically, the story of electric vehicle stocks is a handful of brands flashing on your radar, then fading as another handful of brands tops that one. It's almost impossible to tell what the EV industry will look like from year to year.
One thing is certain, however. While there remains some battle over what makes the best EV - cameras, lidar, or something else - you have little debate over what makes a solid EV battery.
Both Tesla and Nio use lithium-ion batteries, the same ones Apple Inc. (NASDAQ: AAPL) uses for many of its products.
Other battery models have sprung up, like hydrogen fuel cells, which have about ten times the weight and half the power of lithium ion.
Lithium batteries are simply a must-have for every EV car.
So, today, we're showing you the lithium stock to buy as EVs continue to make headlines.
First, here's how we know lithium stocks are about to pop...
Lithium Is Creating a "Gold" Rush
With more players entering the EV market, it's going to ramp up demand for the raw materials required to make these cars and their batteries.
The most eye-catching development of late, as far as raw materials for EVs, was the announcement of a joint venture between KoBold Metals and Bluejay.
Together, they plan to mine lithium, cobalt, copper, and other EV-centric materials in Greenland and Finland. Their stated purpose is to "discover and develop new ethical sources of the critical materials for electric vehicles."
KoBold wants to use artificial intelligence and machine learning to more efficiently mine these materials. Technology will help the group discover more "outstanding orebodies by drawing on world-class expertise in exploration geoscience."
But here's where it really gets interesting...
A fund called Breakthrough Energy Ventures is the principal investor in KoBold. This fund is overseen by Bill Gates and funded by Jeff Bezos, Ray Dalio, and others.
You see, lithium is so important to the EV industry, there's a veritable gold rush going for it. Gates and Bezos are even pouring money into mining it. That is going to raise some eyebrows and potentially lift EV stocks to new highs.
The real story here, however, is not what KoBold is doing - it's why. Moguls like Gates and Bezos have been jumping into altruistic ventures like plant-based meats and clean energy in the last few years. Mostly, they have wanted to mitigate climate change effects.
That's the motive underlying this EV venture - sustaining the environment. And that's the fundamental reason this lithium battery stock will likely pop real soon.
The Best Lithium Stock to Buy Now
Along with all the top entrepreneurs, nations around the world have begun pushing their clean energy messaging - some even setting deadlines for completely eliminating gas-powered engines.
For example, California may require car companies to have a zero-emissions standard as soon as 2035.
Naturally, a number of corporations and organizations may get slapped on the wrist in the process of these trends popping up. China, while not shy about its sustainability goals, also suffers as one of the biggest polluters in the world - hard to avoid with a population of 1.3 billion.
The carbon dioxide from coal burning utilities and plants in China presents poorly to the rest of the world. So, they've been pushing electric vehicles, pumping companies like Nio, Li, and Xpeng harder than ever.
The real beneficiary here, though, is not these carmakers but their suppliers. Here's the company that makes the batteries they need...
Ganfeng Lithium Co. Ltd. (OTCMKTS: GNENF) mines lithium in China and Argentina and has operations in Ireland and Mexico, where lithium batteries are manufactured and sold to companies like Nio and other big Chinese firms.
The benefit of serving the best EV companies China has to offer shows in this company's financials. Ganfeng's profit margin sits at a healthy 25%. Since 2015, the company's compound annual growth rate (CAGR) has been 41%.
Thanks to a worldwide increase in EV interest, Ganfeng earnings growth may hit triple digits going into 2022.
With the EV industry beginning to spark, and EV raw materials making headlines, lithium is a no-brainer. And Ganfeng is the best lithium stock to put on your radar now.
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.