Close menu




July 20th, 2022 | 13:12 CEST

Where is the next 749% lurking? Volkswagen, Edison Lithium, Rock Tech Lithium

  • Lithium
Photo credits: pixabay.com

While many commodities have priced in a recession these days, "white gold" is shining brighter than ever. Lithium, an important basic material for accumulators and batteries, is referred to as "white gold". As recently as 2020, the price of a ton of lithium carbonate was quoted at just over USD 8,000. Today, the coveted substance stands at a whopping USD 71,000. Here is how investors can profit from this trend and which companies need to dress warmly.

time to read: 3 minutes | Author: Nico Popp
ISIN: VOLKSWAGEN AG VZO O.N. | DE0007664039 , Edison Lithium Corp | CA28103Q1090 , ROCK TECH LITHIUM | CA77273P2017

Table of contents:


    Volkswagen: Good market position

    Volkswagen is a big player worldwide when it comes to passenger cars. After the diesel scandal in 2015, however, the Wolfsburg group was quickly seen as a discontinued model - observers found it too dirty and old-fashioned. But the crisis was a shot across the bow for Volkswagen at just the right time. Today, the group is considered a serious manufacturer of e-cars. The ID.3, for example, is a model that is hard to imagine German roads without. But if you need a lot of electric cars, you also need lithium. Rising prices for the "white gold" are also putting pressure on carmakers - after all, margins fall when raw materials become more expensive.

    Many automakers, such as BYD have long invested in lithium deposits. Volkswagen also entered into a cooperation agreement with the Vulcan Group years ago in order to secure CO2-free lithium from Germany. A few days ago, the lithium company Rock Tech Lithium also announced the conclusion of a framework agreement for the supply of lithium hydroxide with an as yet unnamed car manufacturer from Germany. Who is it? Unclear! The fact is that all German car manufacturers would do well to secure large quantities of the coveted material as early and as cheaply as possible.

    Edison Lithium: Good start, low valuation

    When the lithium market is in turmoil, smaller companies usually benefit directly. Especially in a friendly market environment, it usually does not take long for resourceful investors to discover the second and third tiers for themselves. And today? Companies like Edison Lithium are trading near their all-time lows on the stock market. Yet Edison Lithium operates in Argentina only about 20 km from the country's largest lithium producer, Livent, where it has two exploration licenses.

    A few months ago, Edison Lithium divested its cobalt activities in Canada and is now fully focused on "white gold". In South America, a reorientation is currently taking place. Many investors are more critical of Chile after some rigorous laws and are focusing on Argentina or even the emerging Bolivia. Since Edison Lithium paid only about USD 1.85 million for its lithium activities and is now valued at only about EUR 6 million, the stock could become the market focus given the general lithium hype. While Edison is an early-stage explorer, this can also be an opportunity: There is no need to struggle with the adversities of the operating business yet. The only thing that counts is the perspective, which could become much clearer in the coming months. If you think speculatively, make a note of this value.

    Rock Tech Lithium: This is the way to go!

    Where the journey can go for small lithium companies is also shown by the share price performance of the already mentioned company Rock Tech Lithium. The German-Canadian company focuses on sustainable mining in Canada and processing in Germany. In the meantime, a lithium hydroxide factory in Guben is already planned. There are also numerous cooperations with industry representatives, such as ThyssenKrupp Materials. The share has risen significantly since its early days. Over a period of three years, the return on investment is a whopping 749%. Therefore, Rock Tech Lithium is an example of the lithium rush of the past years.


    Investors who want to invest in lithium have a variety of options: Car manufacturers that have already secured deposits are a relatively conservative option. Examples are BYD and Volkswagen. Growth stocks such as Rock Tech Lithium are more speculative. Although no significant sales are made here yet, Rock Tech Lithium already has a foot in the door and is well-positioned thanks to various cooperations. The downside is the already ambitious valuation. In contrast, stocks like Edison Lithium look "dirt cheap". Here, not so much has happened operationally yet, but further exploration results could make the overall picture much clearer.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by Nico Popp on November 9th, 2022 | 10:07 CET

    The second Rock Tech Lithium? This is how Mercedes-Benz profits! Jack of all trades Infinity Stone Ventures

    • Mining
    • Lithium

    Anyone who has followed analysts' reports on lithium over the past few years knew that the price of this critical raw material for batteries was about to rise exponentially, reminiscent of the gloomiest forecasts of the pandemic - only extremely positively. Putting the actual price curve next to it shows that lithium has shot up almost vertically in recent years and has already reached the level of the 2030 forecasts. Using three stocks as examples, we outline what this means and how investors can take advantage of this market anomaly.

    Read

    Commented by Stefan Feulner on November 2nd, 2022 | 10:24 CET

    BYD, Infinity Stone Ventures, Rock Tech Lithium - Profiteers of the energy transition

    • Mining
    • Lithium
    • Electromobility
    • Commodities

    Electromobility plays a central role in achieving the ambitious goal of climate neutrality by 2050. Despite current production difficulties in the automotive industry due to the ongoing chip shortage, global supply chain problems and the effects of the war in Ukraine, demand for battery-powered vehicles continues unabated worldwide, as can be seen from the sales figures of electric car manufacturers. However, there is a problem here: the critical raw material lithium is already becoming scarce for the production of electric batteries. As a result, the already high prices are likely to rise further in the long term - to the advantage of the lithium producers.

    Read

    Commented by Fabian Lorenz on October 20th, 2022 | 13:01 CEST

    Shares: Porsche does it like Tesla - Varta is not there, and Infinity Stone Ventures?

    • Mining
    • Lithium
    • Batteries
    • Electromobility

    E-car specialists like BYD and Tesla have had them for a long time: their own gigafactories. German automakers have long neglected their own battery production. It is surprising because, with electromobility, energy storage is becoming the heart of every car. Here in Germany, Porsche is now stepping on the gas and accelerating the development of its battery production. This could become a model for the entire VW Group. Unfortunately, German battery hopeful Varta is again not involved in the project. The Company seems to be making no headway in its search for partners. No matter who builds the batteries, companies like Infinity Stone Ventures stand to benefit. The specialist for critical raw materials is currently stepping on the gas in its projects, and the positive newsflow should continue.

    Read