Why ASX lithium shares are rocketing higher today

Galaxy Resources Limited (ASX:GXY) and other ASX lithium shares are rocketing higher on Wednesday. Here’s why…

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Cut outs of cogs and machinery with chemical symbol for lithium

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One of the best performing groups of shares on the market on Wednesday has been the lithium miners.

In morning trade there are a number of lithium miners racing higher on the All Ordinaries index.

Highlights include:

The Galaxy Resources Limited (ASX: GXY) share price has stormed 12.5% higher to $1.18.

The Neometals Ltd (ASX: NMT) share price has rocketed over 22% higher to 22.5 cents.

The Orocobre Limited (ASX: ORE) share price has jumped a sizeable 12% to $3.43.

The Pilbara Minerals Ltd (ASX: PLS) share price has surged 12% higher to 34.7 cents.

Why are the lithium miners racing higher?

Whilst another incredible rise in the Tesla share price is no doubt helping with investor sentiment, the key catalyst for today’s gains appears to be comments by UK prime minister Boris Johnson.

According to the BBC, the UK government will now ban the sale of new petrol and diesel cars from 2035. This is five years earlier than previously planned, giving the auto industry just 15 years to ditch fossil fuels.

It is worth noting that hybrid vehicles will also be covered by the ban.

The change, which remains subject to a consultation, came after experts warned that the previous target date of 2040 would be too late if the UK wants to achieve its target of being carbon neutral by 2050.

Mr Johnson said the 2050 pledge was necessary because the UK’s historic emissions means the UK has “a responsibility to our planet to lead in this way.”

If other nations follow suit then it could give the sales of electric vehicles a real boost in the coming years. This would likely lead to increasing demand for battery materials such as lithium and also graphite.

Incidentally, the Syrah Resources Ltd (ASX: SYR) share price is up over 8% at the time of writing. It is the owner and operator of the massive Balama graphite operation in Mozambique.

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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