Lithium stocks are now ridiculously oversold.

And most are starting to bounce back. All thanks to increased demand for electric vehicles, and the same supply-demand issue the world has been facing for quite some time.

Automakers are so concerned about supply for EV batteries, they’re racing to secure supply. For instance, Albemarle will deliver more than 100,000 tonnes of lithium hydroxide over a five-year period to support Ford EVs. General Motors invested $650 million into Lithium Americas’ Thacker Pass mine, where the miner estimates the lithium extracted can support the production of up to a million EVs per year.

Also, according to Stellantis CEO Carlos Tavares, there’s not enough lithium go around for the industry’s plans. “We know that we need lithium. We know that we are not producing as much as we need. We have right now 1.3 billion cars (that are) internal combustion engines powered on the planet. We need to replace that with clean mobility. That will need a lot of lithium. Not only the lithium may not be enough, but the concentration of the mining of lithium may create other geopolitical issues,” he said, as quoted by The Detroit News.

We also have to consider that by 2035, we could see a supply gap of about 1.1 million metric tonnes – which is 24% less than demand.

All of that makes for a strong argument for lithium stocks, like Albemarle, Lithium Americas, American Lithium, Livent, and even ETFs, such as the Global X Lithium ETF.