Why this leading ASX lithium share is tipped to ride the EV revolution

There’s a good reason ASX lithium shares are gaining a lot of investor attention. Here’s why this lithium producer could lead the charge.

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If you’re thinking that ASX lithium shares are garnering as much attention as Bitcoin of late, you’re right.

That’s partly because some ASX lithium shares have gained almost as much, or even more than Bitcoin has over the past 12 months. And, more importantly, because many leading analysts believe the booming demand for lithium is set to continue for years.

If they’re right, that would be welcome news for shareholders of some of Australia’s top lithium explorers and producers.

Why is the price for lithium soaring?

The price for lithium carbonate has more than doubled since the end of November 2020.

Demand for lithium is soaring as the global electric vehicle (EV) revolution begins to well and truly gain traction. And, as the name implies, lithium is a core ingredient in the lithium-ion batteries that power most EVs.

And it’s certainly not looking like a passing trend.

According to Perennial Value Management portfolio manager Samuel Berridge (quoted by the Australian Financial Review):

We think this has some legs and will be a decade-long phenomenon as we migrate to a cleaner means of generation…

There are going to be blips of euphoria and that’s going to happen in any thematic but I think the EV revolution has achieved critical mass. That’s the way the market is going. There might be some short-term concerns but longer term, this is a rising tide.

How does Berridge recommend ASX investors capitalise on the trend?

Leading ASX lithium share tipped to ride the EV revolution

As the AFR notes, Berridge says Jindalee Resources Limited (ASX: JRL) offers investors a “good way to invest in the EV theme”. The ASX lithium share counts amongst the largest positions in the Perennial Global Resources Trust.

Berridge said, “Jindalee is a lithium developer that’s got the largest lithium deposit in the US and in an environment where trade and nationalisation is key, the US is very cognisant of their supply.”

Last Friday, 9 April, Jindalee Resource’s shares soared more than 55% in intraday trading.

This came after the ASX lithium share updated the market on its mineral resource estimate at its 100% owned McDermitt Lithium Project in the United States. Announcing a big boost in its mineral resource estimate, the lithium producer reported it now holds the largest lithium deposit in the US as measured by contained lithium in Mineral Resource.

Jindalee Resources share price snapshot

Here are some figures for you to back up the hype surrounding ASX lithium shares.

Over the past 12 months, the Jindalee Resources share price has gained a stellar 860%, compared to a 736% gain in the Bitcoin price. (Take that, Bitcoin!) To put that in perspective with the broader share market, over the same time the All Ordinaries Index (ASX: XAO) gained 33%.

Up more than 6% in intraday trading today, Jindalee Resources shares have gained 267% year-to-date.

At the current price of $2.90 per share, the ASX lithium share has a market cap of $146 million.

Trading at a price to earnings ratio (P/E) of 288 times, ASX lithium share investors are clearly pricing in a lot of future growth potential as the EV revolution picks up speed.

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Motley Fool contributor Bernd Struben 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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