The Global X Lithium exchange-traded fund (ETF) recorded a price gain of 123% during 2020 as developments in electric vehicle (EV) markets accelerated, Kallanish reports.

The fund opened on 2 January 2020 at $27.70 before closing the year on 31 December at $61.89, an increase of 123.4% during the course of 2020. The Global X Lithium ETF, also known as LIT, recorded a low of $17.83 during late March as the ongoing impact of the global Covid-19 pandemic became evident, before rallying to a high of $63.00 on the last trading day of the year.

The fund has begun 2021 strongly, reaching a high of $72.50 on Tuesday before opening on Wednesday at $70.21, on the back of record EV sales and increased production figures, and a growing demand for lithium for use within EV battery production.  

ETFs are a type of security that comprises a collection of securities - such as stocks - that often tracks an underlying index. LIT corresponds to the price and yield performance of the Solactive Global Lithium Index, which measures equity performance of global lithium firms.

LIT includes a range of stock from incorporating EV manufacturers, lithium resource developers, lithium-ion battery producers and other battery material firms. The most notable of these include Tesla, Panasonic, LG Chem, Samsung SDI, Ganfeng, CATL, BYD and Albemarle, among others.

Tesla has been by far the stand-out performer among the LIT stocks during 2020, reporting delivery of just below 500,000 units during the year while progressing its gigafactory developments in Europe, China and North America. The company’s market capitalisation has rocketed over the course of the year to approximately $720 billion, dwarfing those of its competitors, while its share price rose to $719.47 at market open on 4 January.

China-based CATL, which acts as one of Tesla’s primary lithium suppliers, also posted a strong finish to 2020 with a closing price of RMB 351.1 ($54.33) on 31 December, following reports that the company is set to make a multi-billion investment in several of its lithium-ion battery production projects.