The electric vehicle (EV) space is set to become one of the fastest growing markets of the next 50 years. This revolution is, concurrently, driving a revolution in another space — lithium — because lithium carbonate is the core component of EV batteries. The lithium industry has historically been very inward looking. Its oligopolistic nature means there’s no real open market price, and the majority of quotes derive from word of mouth on the other side of the Pacific. Nonetheless, analysts expect the price of lithium to explode over the coming decade as the growth in EVs fuels demand for the metal.

So, with lithium out of the picture as a direct exposure, where can an investor look to gain access to the price of lithium going forward?

FMC

This one offers diversified exposure, but right now, outside of the tiny capitalization end of the space, it is difficult to find anything direct. As mentioned above, the industry in its current state is oligopolistic, meaning it is controlled by just a handful of large entities, one of which is FMC Corp. (NYSE: FMC). The company’s focus is on a range of natural resource products, including agriculture, fuel mining and drilling, and health products, but it’s got a dedicated business arm for lithium. It is this arm that will gain the most strength going forward.

FMC has gained over the last year, primarily driven by a resurgence in various natural resources, but also on the back of speculative lithium exposures. It is currently valued at about $7.5 billion, up nearly 50% on its January open, but there is plenty of run room left, even given these gains, as lithium demand picks up and FMC becomes one of the leading global absorbers of this demand.

SQM

In South America, the focus of the lithium mining industry and the global lithium mining industry as a whole, is on the Lithium Triangle. That is an area that covers various regions in Bolivia, Argentina and Chile, forming a rough triangle. It is centered on a salt flat, from which a vast amount of lithium is mined and processed. Salt brine extraction is the cheapest and quickest method of processing the metal, and Sociedad Quimica y Minera de Chile (NYSE: SQM) has claims on a large portion of this flat.

While companies like Tesla Motors Inc. (NASDAQ: TSLA) are currently in the process of securing claims outside the Lithium Triangle, including Mexico and Nevada, the Triangle is still going to form a huge portion of demand over the next 10 years while secondary claims mature from exploration to production. At last count, SQM was valued at $7.9 billion, based on a share count of a little over 120 million. While the stock is 100% off its lows, it is still less than half its all-time highs hit in 2011. It could keep chugging toward those highs as EV matures.

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