The Best Battery ETFs: Invest in Lithium Batteries (LIT and BATT Review)

Switching from fossil fuels to battery-powered cars is critical in fighting climate change. And there are ways to invest in electric cars beyond buying Tesla stock, for example, through an EV battery ETF. We review two popular lithium battery ETFs, LIT and BATT.

SustainFi   Updated March 30th, 2022

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Why invest in EV batteries

Transportation is responsible for 16 percent of global greenhouse-gas emissions. To fight climate change, we must lower emissions from cars as soon as possible, and the electrification of cars is a must. Besides, electric cars don’t need expensive gasoline, produce less noise, and have fewer maintenance requirements. 

The biggest players in the car manufacturing industry are putting out their latest models for the growing consumer base. Tesla is still leading the way, but traditional manufacturers are trying to catch up. According to UBS Research, electric cars are expected to represent 40% of all the vehicles produced globally by 2030, up from 4% today.

Most electric cars run on lithium-ion batteries. The technology was invented in the 1980s and commercialized by Sony in 1991.  Batteries are the most expensive components of electric cars, accounting for 30% to 40% of their cost. As the electric car momentum continues, there has never been a better time to invest in batteries.

Is there a lithium battery ETF?

There are two ETFs, the Global X Lithium & Battery Tech ETF (LIT) and the Amplify Lithium and Battery Tech ETF (BATT), that let you grab shares in battery manufacturers and lithium miners. ETFs are collections of stocks that trade on stock exchanges, and you can easily buy or sell them through your brokerage account.

Lithium is a material that is central to making lithium-ion batteries, so much so that Tesla CEO Elon Musk announced that he wanted to start mining lithium in the Nevada desert to meet supply constraints. Though lithium-ion batteries are also used in laptops and cell phones, in the future most lithium will be used for electric car batteries.

FundTickerExpense RatioAssets ($m)Holdings2022 YTD Performance
Global X Lithium & Battery Tech ETFLIT0.75%$4,80042-9%
Amplify Lithium & Battery Technology ETF BATT0.59%$22587-6%

Learn more about the two ETFs that invest in lithium and batteries.

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Global X Lithium & Battery Tech ETF (LIT)

  • Assets under management: $4.8 billion
  • Expense ratio: 0.75%

Launched in 2010, the Global X Lithium & Battery Tech ETF (LIT) is the largest lithium and battery ETF. It tracks the Solative Global Lithium Index and invests in roughly 40 companies involved in lithium mining or lithium battery production. LIT invests globally, and China is the largest region (40% of assets), followed by the U.S. (22%). This makes sense because, besides being the largest market for EVs, China is a top lithium refiner and battery-maker.

The fund’s holdings are very concentrated. Its top ten investments are over 50% of its assets and include lithium miners Albemarle (ALB) and Ganfeng Lithium (SHE:002460) and battery manufacturers CATL (SHE:300750) and BYD (BYDDF). Albemarle alone is 11% of LIT’s assets. Tesla (TSLA) is also one of the top five holdings. LIT is market-cap weighted, meaning that the ETF assigns a higher percentage of assets to the largest companies.

The fund costs 0.75% ($75 annually on a $10,000 investment). The ETF has been volatile in the past, though it had a great run in 2021, returning over 30%. However, the fund is down roughly 9% in 2022.

Amplify Advanced Battery Metals & Materials ETF (BATT)

  • Assets under management: $225 million
  • Expense ratio: 0.59%

Launched in 2018, BATT invests in battery materials suppliers and battery manufacturers globally. Electric vehicle manufacturers are also included. The top three countries are China, the U.S., and Australia, but the fund is much more diversified geographically than LIT.

BATT has around 90 holdings, double that of LIT, and each investment is capped at 7% of the fund. As a result, the ETF is less concentrated than LIT, and the top ten holdings are about 40% of its assets. The top ten stocks include battery manufacturers CATL, BYD, LG CHem, and Samsung SDI, electric car companies Tesla, Rivian and Lucid Group, and green metal miners BHP and SQM. However, Albemarle, the top lithium miner, is not in the top ten holdings.

BATT has a 0.59% expense ratio. The fund returned only 9% in 2021 and declined 6% in 2022.

Make an impact with your money

Best robo-advisor for green investing

Fees

0.25%

Minimum

$10


Get a green credit card

Fees

$60/year

Minimum

$0

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Fees

$0

$125 for M1 Plus

Minimum

$100

Save and invest spare change

Fees

$3-$5 / month

Minimum

$5

Work with human advisors

Fees

0.49%-0.89%

Minimum

$100,000

LIT vs. BATT: Which one should you pick?

LIT has beaten BATT both over the past three years and in 2021, so it’s not surprising that LIT was able to attract more assets. Why such a big difference?

  • LIT mostly invests in China and U.S.-listed lithium miners and battery companies
  • BATT invests in global battery makers, EV manufacturers and “green metal” miners. It’s not as focused on lithium, so it’s missed out on the major lithium rally
  • Although 32 out of LIT’s 42 holdings are also in BATT, BATT assigns less weight to them. Lithium miners like Albemarle and Ganfeng Lithium are underrepresented in BATT, though it invests in diversified mining companies like BHP Group. However, diversified miners didn’t do as well as lithium miners in 2021

💰 Which battery ETF is best?

You might think that BATT and LIT ETFs would be similar, but BATT has more exposure to battery makers and EV manufacturers, while LIT invests more in pure-play lithium mining stocks like Albemarle. We think that LIT is the better choice for investors who want focused lithium-ion battery exposure. While past performance doesn’t guarantee future performance, LIT has done much better than BATT over the past three years. 

Other “green metal” ETFs

Lithium-ion batteries need metals beyond lithium, for example, copper, nickel, and cobalt. You can invest in these metals, too.

  • Check out this list of the top cobalt ETFs
  • An electric car contains four times as much copper as a gasoline-powered car. Learn about copper ETFs
  • Nickel is another “green metal” you should know about. Learn which ETFs invest in nickel

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

🔔 Looking to invest in individual EV battery stocks? Here is a list of battery stocks.

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