In this article, we will discuss the 7 Undervalued Lithium Stocks to Invest In.
Lithium is a lightweight and highly reactive metal that has become essential to modern energy storage solutions over time. It is commonly used in the form of lithium carbonate, a key component of lithium-ion batteries, which are essential for electric vehicles (EVs) and large-scale renewable energy storage. Recent innovations and cost efficiencies have enhanced EV technology, resulting in a steep increase in lithium demand. According to The Business Research Company, the global lithium market is projected to grow to $9.01 billion in 2025, up from $7.75 billion in 2024, at a compound annual growth rate (CAGR) of 16.3%. However, recent U.S. trade policies on Chinese battery components may disrupt this progress, increasing costs across the energy storage industry.
The swift advancement of clean energy technologies has been a major factor in driving the decline in battery prices. According to the World Economic Forum, lithium-ion battery prices have decreased by over 90% in the past decade, with a 40% drop witnessed in 2024 alone. Chinese manufacturers have been at the forefront of the transition to lithium-iron-phosphate (LFP) batteries, accounting for nearly half of the global EV market. These batteries are 30% cheaper than lithium nickel cobalt manganese oxide (NMC) alternatives while maintaining competitive performance.
However, despite these advancements, the lithium market is now facing policy-driven cost constraints. Moreover, U.S. President Trump increased tariffs on China by 10% in March 2025, bringing the total increase to 20% since his new term began. These decisions are in line with the Biden administration’s decision to increase tariffs on Chinese lithium batteries from 7.5% to 25%, starting January 2026. The U.S. Department of Commerce is expected to impose antidumping and countervailing duties on Chinese battery materials, with industry estimates indicating rates of approximately 150%.
These changes have created uncertainty in the energy storage industry. As per Wood Mackenzie, the U.S. energy storage installations will grow 10% annually between 2025 and 2028, which is a significant decrease from the 25% growth in 2024. A mix of tariffs and supply chain restrictions is forecast to dampen development across the sector.
In 2024, global lithium production peaked at 240,000 metric tons due to increasing demand for battery materials. These batteries, primarily for EVs, accounted for 87% of total lithium consumption in 2023, reflecting the highest reliance on lithium by the automotive sector. As EV adoption surges, this trend is anticipated to continue. According to S&P Global Mobility, global battery electric vehicle sales are expected to touch the 15.1 million units mark in 2025. This marks a 30% increase from sales figures in 2024. EVs are expected to make up 16.7% of total global light vehicle sales, reflecting the sector’s important role in sustaining lithium demand.
Looking forward, the performance of the lithium market will be driven by supply-demand dynamics and the effect of trade policies on pricing. As technological advancements are made and AI-driven optimizations continue to reduce costs, increasing tariffs and shifting supply chains could cause instability. As the sector evolves, lithium remains at the center of the global energy transition, despite the risk of market changes due to tariff-related cost pressures.
With that set, let’s look at our list of the 7 Undervalued Lithium Stocks to Invest In.
A close-up of an open-pit mine in the Carolina Lithium Project.
Our Methodology
To compile our list of 7 Undervalued Lithium Stocks to Invest In, we used a Finviz screener to come up with the largest lithium companies. We first shortlisted over 30 lithium stocks and then focused on the stocks trading under 15 times their forward earnings. Next, we looked at the top 7 stocks most favored by institutional investors and ranked Undervalued Lithium Stocks in ascending order based on the number of hedge funds invested in them as of Q4 2024. For hedge fund data, we used Insider Monkey’s database of over 1,000 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
7. Piedmont Lithium Inc. (NASDAQ:PLL)
Number of Hedge Fund Holders: 6
Forward Price to Earnings (P/E) Ratio: 8.68
Piedmont Lithium Inc. (NASDAQ:PLL) is in its development phase, focusing on lithium exploration and production in the U.S. It has complete ownership of the Carolina Lithium Project, which spans over 3,482 acres in North Carolina. The company also has assets in Bessemer City and Kings Mountain.
Regardless of an unexpected decrease in global lithium prices, for Q4 ended December 31, 2024, the company reported strong financials. It recorded a revenue of $45.6 million, an increase from $27.7 million in Q3, due to increased shipments. However, profitability took a hit due to lower lithium prices, with Piedmont Lithium Inc. (NASDAQ:PLL) posting a GAAP net loss of $11.1 million, or $0.55 per share. However, the adjusted net loss stood at $3.6 million, or $0.17 per share, surpassing projections of a $0.43 deficit. The company concluded its year with $87.8 million in cash, up from $64.4 million in September 2024 due to disciplined cost allocation.
Moreover, Piedmont Lithium Inc. (NASDAQ:PLL) reported a record quarterly production of approximately 51,000 tons at North American Lithium (NAL), with a full-year production of 190,000 tons. The completion of a merger with Sayona Mining and a $14 million decrease in corporate expenses further enhanced its financial position. Additionally, the company moved forward with its Ewoyaa Lithium Project in Ghana as it received a mine operating permit, with final approval expected in 2025.
Looking forward, Piedmont Lithium Inc. (NASDAQ:PLL) expects to ship between 113,000 and 130,000 dry metric tons in 2025 while limiting capital expenditures to less than $9 million. The company is focused on obtaining permits for Carolina Lithium, with air and water permits expected this year. Although lithium price variability poses near-term risks, Piedmont’s focus on ramping up production, reducing costs, and strategic positioning could supplement long-term growth as EV adoption increases, making it an undervalued lithium stock.
6. Ultralife Corporation (NASDAQ:ULBI)
Number of Hedge Fund Holders: 9
Forward Price to Earnings (P/E) Ratio: 7.16
Ultralife Corporation (NASDAQ:ULBI) is involved in designing and manufacturing advanced power and communication systems, serving the military, medical, and industrial markets globally. The company operates through two segments: Battery & Energy Products and Communications Systems. It offers a variety of lithium batteries, battery systems, and ruggedized charging solutions.
Ultralife Corporation (NASDAQ:ULBI) reported its financials for Q3 ended September 30, 2024, with sales of $35.7 million and earnings per share of $0.02. Its Battery & Energy Products segment observed an increase of 1.9% in sales; however, the Communications Systems segment posted a decline of 58% as the company moved toward new product offerings. Overall profitability improved, driven by cost-efficiency measures and favorable lithium metal contract negotiations. The company reduced its debt by $4.1 million, improving financial stability.
Moreover, an important milestone for Ultralife Corporation (NASDAQ:ULBI) was the completion of Electrochem’s acquisition on October 31. Electrochem, a top producer of high-temperature, high-reliability lithium cells, is expected to add around $34 million to Ultralife’s annual revenue and further the company’s lithium capabilities. The acquisition serves as a catalyst for accessing premium lithium chemistries, removing the need for a prolonged internal development cycle. Ultralife Corporation’s (NASDAQ:ULBI) management forecasts strong vertical integration opportunities, strengthening its position in high-performance lithium battery markets.
Looking forward, Ultralife is advancing its thin-cell lithium technology for medical wearables and IoT applications, with several qualification projects underway. It also finished a long-term test cycle for its 19 amp-hour D-cell lithium battery, with early production expected to start in 2025. With the company’s focus on innovation in lithium solutions, it ranks among the undervalued lithium stocks.
5. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Number of Hedge Fund Holders: 10
Forward Price to Earnings (P/E) Ratio: 13
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a global mining company that produces lithium, specialty plant nutrients, potassium fertilizers, and iodine. The company plays a vital role in the lithium supply chain, taking advantage of the rising demand for electric vehicles and energy storage solutions. Fueled by strong market demand and successful capacity expansion efforts in Chile, SQM achieved record lithium sales volumes of nearly 205,000 metric tons in 2024.
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) reported over $4.5 billion in full-year revenues, with a gross profit of approximately $1.3 billion, despite decreasing lithium prices throughout 2024. However, a one-time $1.1 billion charge linked to a tax dispute over its mining operations affected its net income.
Furthermore, Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is prioritizing lithium hydroxide production in Chile, aiming to reach 100,000 metric tons in the coming years. In 2025, the company has allocated $750 million to expand lithium capacity both domestically and abroad while reserving $350 million for caliche operations to enhance iodine and iron ore output. Its competitive position in the global lithium market is secured by these efforts, which align with its long-term growth strategy.
Looking ahead, SQM projects that lithium demand will rise by approximately 17% in 2025, with stable pricing trends. The company has forecasted that lithium production will grow to 230,000 metric tons. It remains focused on its collaboration with Codelco on future lithium projects, with regulatory approvals expected later in the year. Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is positioned among the undervalued lithium stocks due to these strategic developments.
4. TETRA Technologies, Inc. (NYSE:TTI)
Number of Hedge Fund Holders: 19
Forward Price to Earnings (P/E) Ratio: 7.13
TETRA Technologies, Inc. (NYSE:TTI) provides energy-related services through its Completion Fluids & Products and Water & Flowback Services segments. The company provides clear brine fluids and additives for global oil and gas operations and produces liquid and dry calcium chloride products. It manages over 40,000 acres of brine leases in Arkansas, containing lithium carbonate equivalent resources of 234,000 tons, and markets ultra-pure zinc bromide for battery firms.
TETRA Technologies, Inc. (NYSE:TTI) achieved strong offshore and industrial chemicals performance despite weaker U.S. land activity in Q4 ended December 31, 2024. Adjusted EBITDA stood at $22.8 million, with margins increasing to 17% from 16.6% in the previous quarter. Industrial chemicals revenue jumped over 9% year-over-year to a record high, while the Completion Fluids & Products segment yielded $311 million in revenue for 2024. Water & Flowback Services witnessed headwinds from lower rig counts and decreased frac fleet activity but continued to prioritize water recycling and desalination.
Moreover, TETRA Technologies, Inc. (NYSE:TTI) increased production of its zinc bromide-based electrolyte with initial shipments to Eos Energy Enterprises. Its 2025 growth is supported by its expansion efforts in Brazil and deepwater projects in the Gulf of Mexico. To tackle rising water disposal hurdles in the Permian Basin, TETRA introduced the OASIS Total Desalination Solution (TDS).
Moving forward, TETRA Technologies, Inc. (NYSE:TTI) forecasts a pre-tax net income of between $19 million and $34 million, with adjusted EBITDA ranging from $55 million to $65 million for Q1 and Q2 2025. Lithium and bromine initiatives in Arkansas could fuel long-term growth, whereas cash flow is expected to be strengthened by a $345 million U.S. tax loss carryforward. The strategic initiatives, coupled with the company’s financial projections, rank it among the undervalued lithium stocks.
3. EnerSys (NYSE:ENS)
Number of Hedge Fund Holders: 30
Forward Price to Earnings (P/E) Ratio: 9.33
EnerSys (NYSE:ENS), a multinational leader in energy storage solutions, specializes in advanced battery systems for commercial, industrial, and defense applications. The company provides a diverse portfolio of battery technologies, including Thin Plate Pure Lead (TPPL), lead-acid, and lithium-ion, aiding mission-critical infrastructure and logistics.
Fueled by strong aerospace and defense demand, gradual recovery in the U.S. communications market, and contributions from Bren-Tronics, EnerSys (NYSE:ENS) reported revenue of $906 million, signifying a 5% year-over-year growth. The Motive Power segment contributed $359 million in revenue, with adjusted operating earnings of $53 million. The company accomplished significant margin expansion despite revenue coming in below guidance due to a temporary disruption at a customer’s Motive Power plant in EMEA and FX headwinds. Backed by a $75 million benefit from IRA tax credits, the gross margin rose to 32.9%.
Furthermore, EnerSys (NYSE:ENS) is solidifying its position in the lithium-ion market with a $500 million investment in a new gigafactory in South Carolina. The facility will generate various lithium-ion cells for commercial, industrial, and defense applications with an aggregate capacity of 4GWh per year and is set to become operational by late 2027. The company is enhancing its battery technology portfolio via innovation, achieving its first revenue from a fast-charging storage station and ramping up the development of battery energy storage systems (BESS) for warehouse and distribution facilities.
Looking ahead, EnerSys (NYSE:ENS) is set to capitalize on the increasing demand for electrification efforts and energy storage. The company has elevated its fiscal 2025 guidance and projects Q4 to be one of its strongest quarters, with forecasted net sales of between $960 million and $1 billion. By prioritizing high-margin battery technologies and manufacturing efficiency, the company will solidify its leadership in the evolving energy storage sector.
2. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 39
Forward Price to Earnings (P/E) Ratio: 9.12
Rio Tinto Group (NYSE:RIO) is a leading global mining company that explores, extracts and processes minerals. The company operates in four segments: Minerals, Aluminum, Iron Ore, and Copper. Rio Tinto is expanding its footprint in battery materials, particularly lithium, to support the energy transition while iron ore remains a key revenue driver.
Rio Tinto Group (NYSE:RIO) delivered a strong financial performance despite the declining iron ore prices in 2024. Backed by effective cost management and portfolio diversification, the company reported an underlying EBITDA of $23.3 billion and net earnings of $11.6 billion. Strong working capital management was reflected in the operating cash flow, which reached $15.6 billion. In addition, Rio Tinto declared a full-year dividend of $6.5 billion, maintaining a 60% payout ratio for the ninth consecutive year. The company allotted $1 billion for ongoing closure activities to restore previously mined sites.
To strengthen its position in battery materials, Rio Tinto is rapidly expanding its lithium portfolio. It took a significant step in its lithium strategy by announcing a $6.7 billion all-cash acquisition of Arcadium Lithium plc, projected to close in March 2025. In addition, Rio Tinto Group (NYSE:RIO) authorized a $2.5 billion investment to expand the Rincon lithium project in Argentina, aiming for an annual production capacity of 60,000 tons of battery-grade lithium carbonate.
Rio Tinto Group (NYSE:RIO) anticipates a capital investment of approximately $11 billion in 2025, with $3 billion allotted to growth projects. The company plans up to $6 billion in total spending through 2030, as decarbonization remains a priority. As an undervalued lithium stock, its strategic takeovers and project developments position it to take advantage of growing demand in the energy transition sector as the lithium market expands.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 104
Forward Price to Earnings (P/E) Ratio: 14.03
Exxon Mobil Corporation (NYSE:XOM) is a leading global energy company that operates across refining, exploration, and emerging low-carbon technologies. The company is continuously developing decarbonized power solutions for data centers, with its first site projected to be operational by 2028. Exxon Mobil considers its CCS storage network, integrated carbon capture, and transport a key competitive advantage in industrial decarbonization.
Exxon Mobil Corporation (NYSE:XOM) achieved its third-strongest performance in a decade by reporting $34 billion in earnings for 2024, despite challenging market conditions. The company generated $55 billion in operational cash flow, fueled by strong results from both the Upstream and Product Solutions segments. For the fourth quarter ended December 31, 2024, Exxon reported earnings per share of $1.67, slightly below the expected $1.77.
Furthermore, Exxon Mobil Corporation (NYSE:XOM) achieved record production levels in both the Permian Basin and Guyana operations. Permian production is forecasted to grow significantly from 1.5 million barrels per day in 2024 to 2.3 million by 2030. The company is also making progress with four CCS projects scheduled to begin operations within the next 2 years. In addition, Exxon Mobil Corporation (NYSE:XOM) anticipates that its low-carbon business segments, including CCS, lithium, and hydrogen, will contribute $2 billion to earnings growth through 2030. Backing this strategy, the U.S. Department of Energy recently confirmed a $225 million grant to Standard Lithium and Equinor for the Southwest Arkansas lithium project, which aims to generate 45,000 tons of lithium carbonate annually.
Moving forward, Exxon Mobil has a robust pipeline of major projects, including the China Chemical Complex and the Singapore Resid Upgrade, set to launch in 2025. Despite current market challenges, these initiatives are projected to deliver $3 billion in earnings potential by 2026. As an undervalued lithium stock, Exxon Mobil Corporation (NYSE:XOM) is maintaining its leadership in traditional energy operations while balancing its investments in low-carbon technologies.
Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of Undervalued Lithium Stocks to Invest In. While we acknowledge the potential of XOM, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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