The Core Lithium Ltd (ASX: CXO) share price is up 10.7% at the time of writing.
Shares closed yesterday at $1.22 and are currently trading for $1.35.
That puts the Core Lithium shares up a whopping 427% over 12 months. And just this calendar year, shares in the ASX lithium explorer have surged 128%.
For some context, the All Ordinaries Index (ASX: XAO) has lost around 1% year to date.
So, what's going on?
Batteries, batteries, batteries…
It all comes down to, well, batteries.
Lithium is a key element in modern batteries, prized for its light weight and high conductivity.
With electric vehicle (EV) production growing rapidly across the world, demand for lithium has outpaced new supplies.
"Global electric sales have doubled in the last year, led by China and Europe, and this is forecasted to accelerate with tighter government emission standards, new model introductions, longer ranges, and better charging infrastructure," eToro global markets strategist Ben Laidler said.
With EV batteries accounting for roughly 70% of global lithium demand, this has seen average lithium prices rocket more than 480% over the past 12 months. And that's obviously helped drive interest in ASX lithium shares, boosting the Core Lithium share price along the way.
What else is boosting the Core Lithium share price?
Core Lithium received a big lift in early March when it reported on an agreement to supply lithium spodumene concentrate to Elon Musk's Tesla Inc (NASDAQ: TSLA). The agreement will see the company supply 110,000 tonnes of the concentrate over four years.
The Core Lithium share price gained 14% on the day of the announcement.
