The EV market, one of the fastest growing markets today, is projected to continue its fast track at a compound annual growth rate of 22.6% for at least the next 6 years.
Some investors looking to partake in the EV market will buy stocks in auto manufacturers such as Tesla.
The EV battery market is expected to grow at a CAGR of 25% over the next four years to $67 billion, leading to strong demand for lithium, the primary energy source for the batteries.
Among its biggest customers is Panasonic, one of the top three EV battery manufacturers in the world, which are collectively responsible for 70% of the EV battery market.
In its third-quarter earnings results, it reported that total revenue was up 11%, driven partly by the lithium business, which experienced a 35% increase in revenue for the quarter on a year-over-year basis.
That has led to an upward revision for full-year 2021 earnings per share in the range of $3.85 to $4.15 from a previous projection of $3.35 to $3.70, a 17% increase based on the midpoint of ranges.
In October it also announced two new agreements in China, where it will begin production of two new plants in 2022, each with planned production capacity of 50,000 tons of battery-grade lithium carbonate.
As a pure-play lithium producer, it operates a low-cost lithium mineral deposit in Argentina, with its strategy focused on lithium hydroxide — a key ingredient for nickel-rich batteries.
Higher revenue combined with improved market conditions backed by higher pricing and stronger demand resulted in the company providing an upwardly revised full-year guidance for revenue.
In addition to sufficient inventory, the company is also expecting to bring expansion online a year from now, with additional hydroxide production slated for Q3 2022 followed by additional lithium carbonate production in Q1 2023.
The rapid explosion of the EV market in just its early stages is leading to a shortage in lithium, and the need for producers to invest on growing.
Lithium producers, like Albemarle and Livent, that are able to boost capacity to keep up with the production needs could generate increased revenue and stronger earnings.