Electric cars are in demand and the auto industry will need more materials from companies that mine lithium. According to the Institute For Energy Research, prices of lithium carbonate have quintupled in China from a year earlier. The sustained high costs will eventually be passed on to car makers.

As more electric vehicles (EVs) are produced, the demand for lithium will increase as it is one of the main components in EV batteries.

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Here are two dividend stocks to benefit from the rise in demand for lithium:

• EnerSys (NYSE:ENS) is offering a dividend yield of 1.13% or 70 cents per share annually, making quarterly payments, with an inconsistent track record of increasing its dividends. The Reading, Pennsylvania-based company provides stored energy solutions for industrial applications. It also manufactures and distributes energy systems solutions and specialty batteries such as lithium-ion. It also offers battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions. In the first quarter, EnerSys saw its second highest quarterly revenue and volume with net sales of $899 million, up 10.3% year-over-year. Additionally, backlogs grew by $1.5 billion.
• Ganfeng Lithium Co. Ltd (OTCPK: GNENF) is offering a dividend yield of 0.55% or 4 cents per share annually, with no track record for increasing its dividend payments. The Xinyu, China-based company focuses on the development, manufacturing, and sale of deep processed lithium products, lithium new materials, lithium power and energy storage batteries, lithium resources and lithium battery recycling, deriving most of its revenue from Mainland China. In the first quarter, Ganfeng Lithium saw total operating revenues of $5.3 billion up from the previous period of $1.6 billion.

Photo: Andrew O'Brien from Flickr