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Rise in electric vehicles puts lithium price rises and companies in spotlight

A vital component in these vehicles are powerful batteries, made from, among other things, lithium.

Rise in electric vehicles puts lithium price rises and companies in spotlight
Electric cars are becoming increasingly prevalent

The price of lithium has risen 18% this year to around US$9,100 a tonne, compared to  2016, and more than doubled since  2013, and there are more rises to come, according to commentators.

Once known only perhaps as a treatment for psychiatric disorders, the white metal is becoming increasingly known around the globe for its use in lithium-ion batteries, used in everyday objects such as mobile phones.

Electric vehicles in the driving seat...

But the real driver (pardon the pun) is electric vehicles (EVs) and cars. A vital component in these vehicles are powerful batteries, made from, among other things, lithium.

The massive increase in demand for electric vehicles is creating a significant potential for  a shortfall in the commodity in the very near future, reckon experts, and similarly raising the profile and outlook for many lithium focused companies.

And today's news from energy major Shell (LON:RDSB) will certainly not stem the tide of the  lithium and EV craze.

It is poised to open its first wave of charging points at some of its petrol stations in the UK.

The roll-out comes as big energy giants are looking to diversify away from the usual stomping grounds of oil and gas, largely seen as dying sources of power.

Feeling its way...

Shell says it's still feeling its way into the market and only ten of its 1,000 fuel stations – most of which will be in and around London – will add charging points to begin with.

Those points will allow electric vehicle drivers to charge their cars to 80% in 30 minutes, although it won’t come cheap: a top-end Tesla Model S would cost almost £50 to charge from virtually flat to full.

As an example in the UK alone, demand for battery-powered cars has surged in recent years and there are now an estimated 115,000 of them on UK roads, up from almost zero only a decade ago.

In China, the government is working to strengthen environmental regulations and popularize electric vehicles.

Sales of electric vehicles there are forecast to rise 20% from last year to around 290,000 units in 2017, according to one market research firm.

Based on rising forecast for lithium prices, producers and near-term producers of the commodity could hold a lot of potential and those that use favorable pricing to advance to production could see early rewards.

Companies working in this lithium producing sector include Liberty One Lithium Corp (CVE:LBY), Enertopia Corp (CNSX:TOP), Noram Ventures Inc (CVE:NRM), Leading Edge Materials Corp (CVE:LEM), Nemaska Lithium Inc (TSE:NMX).

Quick facts: Liberty One Lithium Corp

Price: 0.045 CAD

Market: TSX-V
Market Cap: $3.5 m

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