We recently published a list of 7 Undervalued Lithium Stocks to Invest In. In this article, we are going to take a look at where Piedmont Lithium Inc. (NASDAQ:PLL) stands against other 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.
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).
A close-up of an open-pit mine in the Carolina Lithium Project.
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.
Overall, PLL ranks 7th on our list of undervalued lithium stocks to invest in. While we acknowledge the potential of PLL, 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 PLL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
