“Demand for the commodity has been rising as of late, which in turn has caused prices to more than double in the past 18 months,” reports Mining.com. “The need for the metal is expected to triple by 2025, but no all the countries rich in lithium are taking advantage of the boom. At the same time, new actors are emerging worldwide.”
Related: Increased Production by Tesla Could Lift Lithium ETF
Lithium is “An essential component in the advancement of alternative energy is the ability to efficiently store power,” according to Global X. ” Renewable energy sources such as solar and wind require generated electricity to be stored because they provide power inconsistently throughout the day. Overhauling the transportation industry to run on electricity, rather than gasoline, requires enough energy storage to power vehicles for hundreds of miles. To meet these energy storage demands, advanced batteries are made from Lithium.”
The massive factory is expected to churn out more lithium-ion batteries annually by 2020 than those made worldwide for all of 2013. Consequently, the greater potential demand has provided a lift to the lithium industry outlook.
Tesla accounts for less than 6% of LIT’s weight and is the ETF’s fourth-largest holding. The ETF holds 27 stocks and has over $229 million in assets under management.