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Play Surging Electric Car Demand with the Lithium ETF

If the rise of Tesla Motors (TSLA) has taught us anything over the past year, it is that electric cars have finally overcome broad consumer stigma, and are worth consideration over gas-powered automobiles. Tesla Motors has made a splash with its cool cars, and a number of other, larger car companies have announced vehicles of their own to tap into this quickly growing market as well.

While this trend has obviously been great news for shareholders of TSLA, the movement of the industry could end up being a long term bullish case for the lithium sector as well. That is because lithium ion batteries are at the heart of the electric car revolution, meaning that both producers/miners of the element, as well as those that make and sell the final battery product, could benefit from this trend.

In fact, while electric vehicles accounted for just 6% of total lithium consumption in 2012 at 1.4 million units, the total is expected to rise to 3.8 million units by 2020. Furthermore, the broad ‘automotive’ category of the lithium battery market accounts for roughly 36% of the space today, but is expected to see annualized growth rates of 37% over the next three years, suggesting it will become an increasingly important component of lithium demand (also read 3 Hot Sector ETFs Surging to #1 Ranks).


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