Written by Amy Legate-Wolfe at The Motley Fool Canada
It looks as though things are heating up in the lithium sector, with major player Exxon Mobile making major moves and investing in the lithium arena. The oil and gas producer announced this week that it is seeking to become the top lithium producer for electric vehicles (EV). And it’s aiming for as early as 2027.
With Exxon stock now moving into the market, it seems as though the need for lithium is only growing. Let’s look at three lithium stocks that could benefit from the recent move.
Lithium Americas (TSX:LAC) saw shares rise on the news that Exxon stock would be expanding into the lithium industry. The company is one of the very few lithium producers that operate in the United States. While it also produces lithium in South America, the company is underway with its Thacker Pass Project in Nevada.
This project alone aims to produce a massive amount of lithium in the near future. However, should Exxon stock and other lithium producers be serious about taking over the industry, Lithium Americas stock may be faced with an acquisition in the future.
For now, shares of Lithium Americas stock are up about 8% since the beginning of this week. Watch out for this stock as the world continues to shift towards lithium producers.
Another of the lithium stocks that investors should consider is a smaller version. This is Standard Lithium (TSXV:SLI), which also saw shares rise on the Exxon stock news. There is always more risk with smaller companies, especially in the mining sector. But SLI stock could also be in for an acquisition, as the lithium market grows.
Furthermore, SLI stock recently came out with earnings that proved quite positive for the company. The stock continues to expand in eastern Texas and has expanded its production of lithium as well. Furthermore, the lithium stock has also expanded in other basic materials, such as potash. This provides some diversification to help the company continue to grow.
For now, SLI stock is up about 11% since the news came out this week on Exxon stock. So, if you’re looking for perhaps a bit more of a risk-versus-reward scenario, SLI stock could be a good option.
Both of these lithium stocks have serious potential in the near future. Yet the move by Exxon stock has certainly pushed these two stocks to the forefront. It’s likely that other oil and gas giants will soon move into the EV atmosphere. When they do, they’re going to need to find a way of producing lithium just as strongly as Exxon stock.
However, it’s not going to be a straight climb to the top. This investment from Exxon stock is major news, but it looks as though it could take until 2030 to achieve its future hopes and dreams. Because of this, I would consider lithium stocks a great long-term purchase.
As always, make sure your investments align with your goals. If you’re going to need cash soon, perhaps sit this one out. However, if you’re in for a bumpy short-term ride but a long-term investment, perhaps consider these two lithium stocks today.
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