Last year, lithium prices plunged, leading to a significant correction in some of the best lithium stocks. The outlook for lithium remains bearish for the year and the recovery is likely to be gradual. However, there is no doubt that lithium demand will swell in the coming years on the back of rising EV adoption. Some analysts are predicting that global lithium shortage can come as early as 2025.

Given the current sentiments and the long-term outlook, it’s one of the best times to buy lithium stocks. With the price plunge, lithium stocks are deeply undervalued. I would buy at this time and not when there is a renewed euphoria. Of course, gradual exposure can be considered instead of a big plunge.

Let’s talk about three of the best lithium stocks to buy for multibagger returns by 2030.

Albemarle Corporation (ALB)

Among the blue-chip lithium names, Albemarle Corporation (NYSE:ALB) looks attractive for exposure at current levels. ALB stock trades at a forward price-to-earnings (P/E) ratio of 6.3 and offers a dividend yield of 1.17%. I believe that the downside is capped at current valuations and the upside potential is meaningful. Of course, the basic assumption is that lithium stabilizes and gradually trends higher.

It’s worth noting that even with depressed lithium price, Albemarle reported revenue growth of 10% for Q3 2023 at $2.3 billion. Further, adjusted EBITDA was at $453.3 million. Albemarle has guided for operating cash flow of $700 million for the year. EBITDA margin has compressed and OCF will be subdued.

However, the worst of the correction seems to be over for lithium. As Albemarle invests in lithium conversion capacity expansion, I expect robust numbers in the next few years. Between 2022 and 2027, the company is targeting tripling of lithium conversion capacity to 600ktpa. It therefore makes sense to invest when sentiments are depressed as the reversal can be strong.

Lithium Americas (LAC)

Lithium Americas (NYSE:LAC) stock is a potential multibagger from current levels of $6. Like most lithium stocks, the downside has been significant for LAC stock. However, considering the asset potential, it makes sense to gradually accumulate.

As an overview, Lithium Americas has ownership in the Thacker Pass project in the United States. The asset is the largest known measured and indicated lithium resource in the country. It’s also the only fully permitted project and has an after-tax net present value of $5.7 billion. In comparison, Lithium Americas currently commands a market valuation of $1 billion.

It’s worth noting that General Motors (NYSE:GM) is an investor in the project with $650 million infusion in two tranches. GM also has an offtake agreement from Phase One production for ten years. With a strong backing, I don’t see any financing concerns through project completion.

Standard Lithium (SLI)

Let’s also talk about a lithium penny stock with high potential. If lithium surges in the next few years and sustains at higher levels, I believe that Standard Lithium (NYSE:SLI) stock can deliver 10x returns.

As an overview, the company’s flagship project is in Southern Arkansas. The mine has a net present value of $4.5 billion as compared to the current market valuation of $330 million. One reason for the deep undervaluation is the plunge in lithium prices.

Another reason is that the project development cost is $1.3 billion in a base-case scenario. If Standard Lithium can secure financing for the project, SLI stock will skyrocket. I must add that the company’s Lanxess project has an after-tax net present value of $772 million.

Therefore, there is immense potential in terms of assets. It remains to be seen if the company can execute the project in the next few years and secure ample financing.

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On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.