I feel that now is an ideal time for investors to consider buying into the best lithium stocks outlined in this article. This is because the market for electric vehicles (EVs) and renewable energy solutions is rapidly growing, and lithium, which isan essential element in batteries, is rapidly gaining market attention.

Some of the factors that are driving this growth include improvements in lithium battery technologies and enhanced production capacities. The increase in the use of EVs, coupled with global efforts to cut down on pollution, has made lithium a strategic commodity for the future. 

I feel that navigating these trends is best done by investing in the best lithium stocks that the market has to offer. These companies are well-placed to take advantage of the rising lithium market and are predicted to lead to significant capital appreciation for investors in the future.

So here are three of the best lithium stocks for investors to buy.

Piedmont Lithium (PLL)

Piedmont Lithium (NASDAQ:PLL) focuses on the exploration and development of lithium in the U.S. I also think that PLL is one of the best lithium stocks to buy for investors.

The Carolina Lithium and Tennessee Lithium projects that Piedmont is currently working on are expected to greatly increase lithium hydroxide output. These projects, complemented with investments in Sayona Mining (OTCMKTS:SYAXF) and Atlantic Lithium (OTCMKTS:ALLIF), allow PLL to expand on the opportunities arising from electric vehicle and battery storage markets.

Not only that, but in the short-term PLL is expected to report breakeven profitability, as its forward P/E is 6.5x. This is in sharp contrast to many of the more speculative lithium stocks on the market that aren’t expected to report profits for years or even longer. Thus, I think that PLL strikes a nice balance between risk and return considering its market cap is only 176 million.

Lithium Americas (LAC)

Lithium Americas (NYSE:LAC) develops lithium projects in Argentina. LAC is also one of the best lithium stocks for investors seeking contrarian opportunities in the market. This is because its stock price has fallen 69.36% in the past year.

Nevertheless, LAC still has plenty of room for growth. Thacker Pass is one of the largest lithium resources globally, and the full development of this mine is projected to have an outsized effect on the lithium market. The company is well placed to ride on the growing lithium demand, buoyed by the steady rise in the delivery of electric vehicles.

What I also like about LAC is that it has secured conditional commitment from the U.S. Department of Energy to help fund Thacker pass to the tune of $2.26 billion. If finalized, it may help the U.S. wean off its geopolitical dependence on other countries for lithium, which is in alignment with Trump’s America-first politics, but is equally mirrored by Democrats. Therefore, the deal seems likely provided LAC passes its due diligence checks.

Albemarle (ALB)

Albemarle (NYSE:ALB) is a leading producer of lithium for batteries. The main cause of contention around ALB is that the company’s revenue has been significantly impacted by plummeting lithium prices, which can mostly be chalked up to some cyclical wobbles occurring in China’s economy.

These oscillations in the lithium price should be expected by any serious investor with an interest in commodities. Still,  despite the decline in lithium prices, Albemarle has achieved cost savings, saving $90 million in productivity improvements.

Albemarle also expects a 2.5x increase in lithium demand from 2024 to 2030, with China being the key growth market. 

Like the other best lithium stocks in this article, ALB’s stock price is also sorely depressed, as it has lost 57.55% of its value over the past year. Still, if investors only buy stocks when they are trending and hot, one may have little opportunity to buy low and sell high. ALB’s outlook and cost-saving measures then provide a nice risk-to-reward ratio.

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

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.