The 5 best ASX lithium stocks of 2021

Lithium was a hot commodity in 2021…

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One of the hottest areas of the market in 2021 was the lithium sector. Huge returns were generated for investors over the 12 months as demand for the white metal soared thanks to its use in electric vehicle batteries and renewable energy.

But which ASX lithium stocks were the best ones to own in 2021? Listed below are five lithium shares included in the All Ordinaries index that provided mouth-watering returns for investors last year.

Novonix Ltd (ASX: NVX)

The Novonix share price was on fire and recorded a 660% gain in 2021. A key catalyst for this rise was news that the lithium-ion battery technology company signed a deal with Phillips 66. The US energy giant acquired a 16% stake in Novonix for US$150 million and believes its investment will support its development of an entirely domestic supply chain for the growing US electric vehicle (EV) market and other energy storage systems.

Liontown Resources Limited (ASX: LTR)

The Liontown Resources share price was some way behind with its impressive gain of 388%. Excitement around the lithium developer’s Kathleen Valley lithium project in Western Australia helped drive its shares higher. The project’s DFS highlighted production of 658ktpa SC6 with potential for conversion into 86ktpa lithium hydroxide.

AVZ Minerals Ltd (ASX: AVZ)

The AVZ Minerals share price was a very strong performer and rose 356% over the 12 months. There were concerns in recent years that this lithium developer’s Manono project in the Democratic Republic of the Congo was not economically viable and doomed to failure. However, a significant rise in lithium prices has suddenly changed all that. This ASX lithium stock is due to make a final investment decision on the project in the near future.

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price managed to record a 277% gain in 2021 despite being attacked by a short seller. Investors appear optimistic that Vulcan’s Germany-based Zero Carbon Lithium Project will benefit greatly from demand for lithium from European car manufacturers.

Pilbara Minerals Ltd (ASX: PLS)

Finally, the Pilbara Minerals share price continued its impressive run and charged 268% higher in 2021. Pilbara Minerals is the only one in the group that is already producing lithium and benefiting from sky high prices. Following last year’s gain, the company’s market capitalisation has now ballooned to almost $10.5 billion. This makes it the largest lithium stock on the ASX.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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