Lithium Americas (TSX:LAC)(NYSE:LAC) is a Vancouver-based resource company. It operates the Cauchari-Olaroz lithium brine project in Argentina, and the Thacker Pass lithium claystone project in Nevada.
Shares have climbed 39.4% in 2019 as of early afternoon trading on April 9.
The lithium production rush dissipated in 2018 as the spot price of lithium softened and investment began to dry up. Bears claimed that the increased demand was overstated even as the electric vehicle (EV) market is set to accelerate over the next decade. Volkswagen has said that approximately one quarter of the vehicles it delivers will be electric in 2025.
"Consequently, there will be a rapid increase in our raw material demand for cell production," said Volkswagen Components and Procurement board member Stefan Sommer.
This month Volkswagen announced that it had secured 10 years worth of lithium for its electric car batteries from the Chinese manufacturer Ganfeng. In early April Ganfeng announced that it would spend $160 million to boost its ownership stake in Lithium Americas’ Argentina project. It will go forward as a 50/50 venture.
The assist from Ganfeng assures that the project will be fully-funded as it moves ahead.
Lithium Americas is trading at the middle of its 52-week range. Shares had an RSI of 59 as of this writing, which puts the stock outside of overbought territory as we approach mid-April.
Investors should expect volatility for lithium miners as we push into the next decade, but analysts are calling for a return to bullish conditions as EV demand really lifts in the 2020s.
