Why is the Liontown (ASX:LTR) share price roaring 5% higher today?

The resources company is roaring this Tuesday.

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ASX share price rise represented by investor riding atop leaping lion

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The Liontown Resources Limited (ASX: LTR) share price is a gift that keeps on giving, surging 340% year-to-date with only momentary breathers along the way.

Earlier, the Liontown share price has added another 7.85% on Tuesday, lifting to a fresh all-time high of $1.855. At the time of writing, it has given up some of its gains and is now trading for $1.80, up 4.8%.

What’s driving the Liontown share price?

The broader ASX lithium sector is surging on Tuesday following some bullish overnight news.

Last night, the Tesla Inc (NASDAQ: TSLA) share price experienced a frenzy of buying after rental car company Hertz, revealed plans to buy 100,000 Teslas.

Tesla shares surged 12.66%, breaking above both the US$1,000 a share level and US$1 trillion market capitalisation for the first time on record.

The jump in valuation was on the back of significant volumes, with 62.85 million shares trading hands, the highest since early March.

The cheapest Tesla models cost around US$40,000, which implies that Hertz would splurge US$4 billion on its new electric vehicle fleet.

ASX lithium shares surged sharply following the news, with heavyweights Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) surging 7.4% and 4% respectively.

While a number of explorers are lifting double digit percentages including Piedmont Lithium Inc (ASX: PLL) and Lake Resources N.L. (ASX: LKE).

What does this mean for Liontown?

The Liontown share price is joining in on the buying frenzy, marking a new all-time high on Tuesday.

The surging demand for electric vehicles and lithium-ion batteries spells good news for the company, which is targeting lithium production by 2024.

Liontown owns the “globally significant” Kathleen Valley Project, a world-class lithium deposit with an initial ~40 year life of mine and competitive costs.

According to its recent company presentation, the company is “well progressed” with offtake agreements, with interest indicated for volumes far in excess of its production capacity.

The company’s planned production has made firm ESG commitments, targeting 50% renewable power for its first production in 2024. And scaling towards 100% renewable power and clean mining/fleet by 2034.

Should you invest $1,000 in Liontown right now?

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. 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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