Lithium ETF surges 125% in a year as prices stabilize and demand grows.

The Global X Lithium & Battery Tech ETF (LIT) has surged 125% over the past year, recovering from multi-year lows as lithium carbonate prices stopped falling and demand projections improved. Key drivers include stable lithium prices after years of oversupply, U.S. government policy signaling support for domestic lithium producers, and steady growth in electric vehicle demand. While the ETF outperformed the S&P 500 in the last year, its five-year returns remain modest due to earlier losses. Investors should watch lithium prices, U.S. policy developments, and EV sales trends to gauge future performance, as the current rally reflects a shift from pessimism to cautious optimism but still carries valuation risks.