Investors looking for the best near term exposure to the electric vehicle thematic should choose lithium stocks, says Aussie investment fund manager Ausbil.

The main winners of the forthcoming electric vehicle boom — in terms of commodity volume growth — are likely to be lithium, nickel and cobalt stocks (and potentially manganese), says James Stewart, resources portfolio manager at Ausbil Investment Management.

But pure-play cobalt companies are hard to find globally, and the nickel market is currently dominated by stainless steel demand.

That leaves lithium as the best opportunity to leverage the EV thematic over the short term.

The Ausbil Global Resources Fund currently holds lithium positions in Galaxy Resources (ASX:GXY), Orocobre (ASX:ORE) and Pilbara Minerals (ASX:PLS).

“Anecdotally, lithium producers are suggesting pricing has increased slightly in recent weeks and months, and demand from customers has stabilised and is increasing,” Stewart says.

“Ultimately, we believe an increase in the lithium price will see a re-rate in lithium equities.

“However, given the nature of the market we believe equities will likely rally well ahead of reported price increases in the commodity market.

With delays in new project construction, we could see a market reminiscent of 2017, where EV and battery makers scramble for product as the market tightens, driving commodity and equity markets higher, Stewart says.

“As such, we have positioned the Ausbil Global Resources Fund long in lithium, leading into expected price increases in Q4 CY2020 and Q1 CY2021.

Lithium explorers and miners, the ones that continued to progress their projects during the ‘dark days’, are now in a pretty good spot.

Here’s how a basket of ASX stocks with exposure to lithium are performing>>>

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:

CODE COMPANY 1 WEEK RETURN % 1 MONTH RETURN % 6 MONTH RETURN % 1 YEAR RETURN % PRICE [CLOSE MON] MARKET CAP
VUL Vulcan Energy 57 72 747 1431 1.99 $128.9M
EMH European Metals 26 34 231 93 0.695 $80.0M
INR Ioneer 26 26 96 2 0.245 $370.1M
INF Infinity Lithium 24 22 243 66 0.11 $30.7M
LTR Liontown Resources 18 -9 141 194 0.265 $454.3M
PLS Pilbara Minerals 17 45 119 69 0.515 $1.1B
PSC Prospect Resources 15 -39 83 -2 0.115 $36.5M
GXY Galaxy Resources 14 34 118 64 1.66 $669.4M
ORE Orocobre 14 11 61 18 3.05 $1.0B
EUR European Lithium 13 -6 -2 -50 0.044 $30.5M
LPI Lithium Power International 12 21 64 -15 0.23 $60.5M
PLL Piedmont Lithium 10 -17 270 236 0.37 $499.0M
RLC Reedy Lagoon 10 -15 450 175 0.011 $5.2M
LIT Lithium Australia 10 4 12 57 0.055 $43.6M
AVZ AVZ Minerals 9 3 41 82 0.082 $255.0M
JRL Jindalee Resources 8 48 172 186 0.83 $35.8M
MIN Mineral Resources 7 13 67 97 28.25 $5.2B
PM1 Pure Minerals 6 13 150 75 0.035 $29.5M
GLN Galan Lithium 4 -17 -14 -29 0.125 $26.0M
AGY Argosy Minerals 4 -6 0 -41 0.051 $54.0M
AML Aeon Metals 4 22 75 17 0.14 $94.9M
ESS Essential Metals 3 -8 -19 -25 0.097 $14.6M
MLS Metals Australia 0 -33 100 33 0.002 $8.4M
CXO Core Lithium 0 -4 -9 30 0.048 $46.7M
AJM Altura Mining 0 0 75 13 0.03 $209.0M
SYA Sayona Mining 0 -20 33 -18 0.008 $20.8M
LPD Lepidico 0 0 0 -52 0.008 $41.5M
FFX Firefinch -2 -6 113 103 0.16 $125.1M
LKE Lake Resources -2 -15 81 49 0.058 $46.7M
ASN Anson Resources -3 -18 65 3 0.033 $24.3M
TKL Traka Resources -9 -9 404 152 0.02 $11.1M
ADV Ardiden -19 -24 550 550 0.026 $55.2M