Lithium-ion batteries are already in widespread use, thanks to smartphones and tablets. Now the technology is gaining ground in the automotive industry. Lithium prices have fallen dramatically in the last few years, and electric vehicles (EVs) are booming as automakers electrify their popular models.
By 2030, some estimates predict EVs will make up as many as one-half of all new vehicle sales. About 8% of all new vehicles sold in the United States were electric in 2025, so the upside for lithium and battery technology is significant for the next decade.
The lithium-ion battery industry is a complex web of basic materials suppliers, manufacturers, and component designers. Picking the best stocks can be a real challenge.
That’s why investing in a lithium and battery technology ETF (exchange-traded fund) could be a smart way to go.
Investing in lithium and battery tech ETFs
An ETF is a basket of investments designed to give an investor diversification. In this case, it's a mix of companies that participate in the lithium and battery tech industry.
An ETF focused on lithium battery tech will provide diversification across the industry. For example, ETFs might hold lithium mining companies, battery manufacturers, EV automakers that integrate the tech into a vehicle, and more.
Unfortunately, since this is such a young industry, there are few choices for ETF pure plays in the industry. However, a number of ETFs pull together collections of businesses that operate in industries adjacent to lithium battery tech and are worth considering as well.
Top ETFs
Fund | Net Assets | Expense Ratio | Description |
|---|---|---|---|
Global X Lithium & Battery Tech ETF (NYSEMKT:LIT) | $1.08 billion | 0.75% | A top ETF on the market for lithium and battery-specific stocks. |
Amplify Lithium & Battery Technology ETF (NYSEMKT:BATT) | $67.4 million | 0.59% | A large pure-play ETF for lithium battery technology stocks. |
iShares Global Clean Energy ETF (NASDAQ:ICLN) | $1.54 billion | 0.39% | The ETF expands beyond just batteries to encompass more aspects of the renewable energy space. |
First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ:QCLN) | $443 million | 0.56% | Another ETF with a focus on everything from batteries to solar power to electric vehicles. |
ARK Autonomous Technology & Robotics ETF (NYSEMKT:ARKQ) | $1.1 billion | 0.75% | A top high-risk, high-reward bet on innovative companies, including stocks in the battery tech industry. |
1. Global X Lithium & Battery Tech ETF
NYSEMKT: LIT
Key Data Points
2. Amplify Lithium & Battery Technology ETF
NASDAQ: ICLN
Key Data Points
The iShares Global Clean Energy ETF (ICLN +1.58%) isn’t solely focused on lithium production and batteries.
Unlike the first two on the list, this ETF has a wider scope. It includes investments in clean energy companies that include lithium and battery technology. The iShares fund includes some of the names found in the GlobalX and Amplify ETFs, too. However, the ETF predominantly invests in adjacent industries such as solar and wind, as well as companies that provide materials and components for solar and wind.
The iShares fund was launched in 2008 and manages $1.5 billion in investor funds. The portfolio comprises about 100 different stocks, and the annual expense ratio is a reasonable 0.39%. Top stocks in the fund include renewable powerhouses such as First Solar (FSLR +14.28%), which accounts for 9.1% of fund holdings, and foreign-listed Vestas Wind Systems, which makes up 6.5% of the ETF.
The ETF has produced negative total returns since inception. Over the past decade, it has managed an annualized gain of just 3.5%.
4. First Trust Nasdaq Clean Edge Green Energy Index Fund
NYSEMKT: ARKQ
Key Data Points
A portfolio energized by lithium battery technology
To be sure, some of these ETFs -- especially the pure-play examples -- haven't exactly delivered stellar returns for investors.
However, lithium battery tech and adjacent stocks hold a lot of promise in the next decade. Electric vehicles are on the rise, and many of the world’s utility companies are looking for ways to make energy distribution more efficient. Batteries are a massive growth trend that could translate to fantastic investor returns.
But bear in mind that nothing is guaranteed in the investing world, especially with new and emerging trends. Lithium and battery stocks will likely be far more volatile than the stock market overall. Plan carefully when deciding whether to include an ETF from this list in your well-diversified portfolio.
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