Geopolitical conditions and inflationary pressures may be putting the market in relatively uncertain waters, but many advisors and investors still agree on one thing: There is a tremendous need for electricity and energy right now. Fortunately, plenty of different investment approaches are available to potentially solve this problem.
Key Takeaways:
- The demand for battery storage and energy grids is on the rise, buoyed by growth in AI, renewable energy, and new data center projects.
- Battery energy storage systems (BESS), a key layer of modern energy grids, redistribute surplus energy amid outages or high-demand periods. These systems sometimes use lithium-ion technology.
- The Sprott Lithium Miners ETF (LITP) offers focused exposure to the global lithium industry, which stands to benefit from growth in the energy storage space.
A recent report from Sprott Asset Management examined the opportunities for lithium amid a global need for electrification. The report, penned by Jacob White, CFA, director, ETF product management at Sprott Asset Management, noted that a rise in renewable energy, AI innovation, and data center expansion is leading to growing demand for battery storage.
Battery Storage Demand: A Tailwind for Lithium
In particular, White highlighted battery energy storage systems (BESS), which can store surplus energy and redistribute it to help deal with outages or periods of high demand. Given their flexibility, BESS are nowadays a crucial component for the modern energy grid. Of course, lithium is a critical component of many BESS around the world, due to the implementation of lithium-ion battery technology.
Advisors and investors may be wondering why momentum around energy storage and BESS is so crucial to the price of lithium. Looking back, the main driver of lithium’s price in recent years has been electric vehicles. While the EV space has seen growing demand, it has largely been dominated by consumer spending.
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Meanwhile, lithium’s deployment in the energy grid represents more of a long-term driver, given that it is powered by infrastructure investments. This makes it much easier to predict than EV sales, working as a favorable tailwind for lithium miners.
The Sprott Lithium Miners ETF (LITP ) may be well-positioned to capitalize on the growing opportunities within lithium and energy storage. This fund invests in a wide variety of different producers, exporters, and developers of lithium from across the globe.
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LITP’s track record helps illuminate why lithium offers such a compelling investment case at the moment. As of May 31, 2026, LITP’s NAV has risen 235.11% over 12 months.
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Disclosures
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
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