Lithium Americas

Lithium Americas (LAC) Stock Forecast

Canada-based Lithium Americas Corp (LAC) has lithium mining operations in the United States and Argentina. Lithium is in great demand globally due to the anticipation of the growth in the electric vehicle (EV) market, fueled by lithium-ion batteries. The lithium price has been on a tear due to strong demand. 

Lithium Americas Corp is in the process of separating its Argentinian business from its North American operations — Lithium Americas for North American assets and Lithium International for the South American assets. This will help the company get its U.S. operations in Nevada started while its China-based partner, Ganfeng Lithium Co, can focus on South America mines. 

Lithium America’s Nevada mine holds the largest known lithium deposits in the U.S. LAC trades on both the Toronto Stock Exchange and the New York Stock Exchange. 

How do we estimate LAC will do in 2023? 

The LAC stock forecast is bullish for 2023 thanks to the strengthening demand for electric vehicles. Lithium Americas produces the very resource that’s needed to produce the batteries. Wall Street analysts have a “buy” rating on the stock. The median price target is $37, the highest of which is $42.50. 

Lithium Americas is expanding. The company has rights to over 160,000 hectares across five salt lakes in Argentina’s Jujuy and Salta provinces. It is targeting more lithium carbonate capacity in Argentina’s Caucharí-Olaroz and starting production at Thacker Pass in the U.S. state of Nevada to keep up with demand. 

The company is facing litigation in the U.S. over the permitting of its Thacker Pass project in the U.S. and appears confident about the progress. This legal conflict over the Nevada mine has been dragging on for years, which is a potential headwind for the stock. The company plans to begin construction on its Nevada mine in 2023. 

Nevertheless, hedge funds have been buying up LAC shares, which is a bullish sign for individual investors. As of 2023, more than a dozen hedge funds own shares of Lithium America in their portfolios. LAC stock could reclaim the $40 level that it achieved in Q1 2022, fueled by these potential milestones. 

How do we estimate LAC will do in 2024? 150 words

The LAC stock forecast could also be bullish for 2024, especially if the company manages to reach some resolution in its litigation surrounding Thacker Pass. The conflict around the clay mine involves environmentalist and indigenous groups that are opposed to the project despite U.S. government approval. 

If Lithium Americas is able to begin Phase 1 and Phase 2 construction on its Nevada-based Thacker Pass project in 2023, as the company expects, this could be a potential catalyst for LAC stock in 2024. 

In addition, assuming that Lithium Americas has completed the separation of its North American and South American businesses by 2024, this could be a tailwind for the stock. Investors already rewarded the stock with a rally when the announcement was made, so this should be received positively by the market. 

How do we estimate LAC will do in 2025? 

One way to gauge the LAC stock forecast is to explore where lithium prices could be trading in 2025. Wall Street firms have mixed views

Investment bank Goldman Sachs is bearish on the lithium price in the coming years. The bank expects that the market will be flooded with supply due to demand stemming from the EV market. This will then pressure the price, the bank says. Macquarie Research, on the other hand, expects lithium prices to keep a steady pace through 2026 due to higher demand vs. supply. 

As illustrated in the below chart, lithium carbonate prices have soared between 2021 and 2022 to $79,000 per ton in China. According to Lithium Americas, lithium demand is projected to increase by more than 1,200% in the two decades leading up to 2040, all bullish signs for the LAC stock price. They foresee a lithium supply gap due to the predicted strengthening demand. 

Image by Lithium Americas 

How do we estimate LAC will do in 2030? 

The forecast for EV adoption is quite robust for 2030, and LAC stock is poised to be a key beneficiary of that growth. BloombergNEF predicts that more than 50% of passenger cars that are sold in the United States will be EV by the year 2030, fueled largely by government incentives. 

Meanwhile, global lithium demand is forecast to rise to 2.3 million metric tons by the new decade, a fourfold increase from current levels. As Lithium Americas continues to acquire new assets, it is going to be right in the center of this demand. 
A key for Lithium Americas will be to sign up EV makers in the U.S. market. Leading EV maker Tesla has signed contracts with multiple lithium producers and even plans to do potentially some lithium mining of its own due to sky-high lithium prices. If Lithium Americas could become a supplier to Tesla, this would be a major catalyst. Other automakers including Ford and General Motors are also making a push into the EV market, so there’s no shortage of potential customers for Lithium Americas.

FAQ

Who are LAC’s biggest competitors?

Lithium Americas competes with the likes of ioneer Ltd, Albemarle Corp, Piedmont Lithium and Livent Corp, among others. While Lithium Americas is the only U.S.-based lithium producer, Albemarle has secured EV maker Tesla as a customer.

How much money has the company raised in its existence?

Lithium Americas has raised over $1 billion in debt and equity.

How long has Lithium Americas been around?

The company was incorporated in 2009, so more than a decade.

 Is the lithium price high?

The last time the lithium price reached a fresh record high was at year-end 2022. The battery-grade lithium price doubled in 2022 to approximately $85,000 per ton. 

 Is Lithium Americas an environmentally friendly company?

Lithium Americas has invested in a lithium-ion battery recycling company called Ascend Elements, which uses renewable natural resources to make battery materials.