Why has the Novonix (ASX:NVX) share price rallied 32% in 3 weeks?

Is the electric trend lighting up Novonix's light bulb?

The Novonix Ltd (ASX: NVX) share price continues to charge higher after its temporary downfall earlier in the month. This is despite a complete lack of price-sensitive announcements since 3 September 2021.

In afternoon trade, shares in the battery materials and technology company are swapping hands for $6.92, up 7.62%. The company's shares are now less than 3% off their all-time high of $7.11, achieved last month.

To put today's gain into context, the S&P/ASX 200 Index (ASX: XJO) is down 0.1% at the time of writing. The impressive move in the battery company's value places it as the fourth-best performing share in the benchmark index today.

Young boy looks shocked as he lifts glasses above his eyes in front of a stock market graph. representing three ASX 300 shares hitting 52-week lows today

Image source: Getty Images

Prevailing green and electric tailwinds

Although there hasn't been any company-specific news hitting the markets, there have been catalysts within the 'green' space. A culmination of positive indicators for the push towards more sustainable endeavours could be benefitting the Novonvix share price.

Firstly, the common battery material, lithium, has remained on its upwards trajectory in recent weeks. According to Mining Journal, the price for lithium hydroxide is approaching US$30,000 per tonne. Notably, this surpasses the previous record price of US$25,000 per tonne in 2018.

While Novonix doesn't offer lithium, it does produce 'PUREgraphite'. This is what the company labels as an environmentally friendly, lower-cost graphite anode for lithium-ion batteries. As demand increases for synthetic graphite anode material, Novonix plans to provide the supply.

Secondly, another recent development that embodies the evolution of the green transition involves the Australian government. Yesterday, the National Party agreed to a deal that will see the country aim for net-zero emissions by 2050.

Finally, the last potential catalyst for the Novonix share price involves the iconic electric vehicle (EV) manufacturer, Tesla Inc (NASDAQ: TSLA). Overnight, the company headed up by Elon Musk entered the trillion-dollar club. The milestone moment followed the rental car company, Hertz, making an order for 100,000 EVs to add to its rental fleet.

In response, numerous ASX-listed battery-focused resource companies have experienced a surge in price during today's session.

Novonix share price is shooting the lights out

In the last 12 months, Novonix has made a lot of very happy and wealthy individuals. Remarkably, the Novonix share price has soared 473% during the last year, reaching a market capitalisation of $3.3 billion. This is despite the company pulling only $5.23 million in revenue during FY21.

While the rise in the company's valuation has been nothing short of meteoric, some fund managers still fancy the value proposition.

Motley Fool contributor Mitchell Lawler 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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