A forecast boom in electric vehicle production is driving investor interest in lithium shares.
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The Novonix Ltd (ASX: NVX) share price is soaring to another new all-time high.
At time of writing, the ASX lithium-ion battery company is trading for $6.22 per share, up 3.67% in intraday trading, having earlier posted gains of more than 8%.
Below, we look at what been driving the Novonix share price to a series of new records.
What’s driving the extended run higher?
The Novonix share price has set a number of new record highs over the past month.
While there are company specific factors helping drive the company’s valuation higher, it also looks to be benefiting from rapid growth in the demand outlook for lithium-ion batteries. These are among the top options to power the expected explosion in electric vehicles (EVs) numbers over the coming years.
In the first 2 weeks of September alone, booming demand for lithium saw technical and battery grade lithium carbonate prices rocket by more than 20% in the Chinese domestic market, according to data from Bench Mark Minerals.
Battery grade lithium prices have now soared 215% in 2021.
As for the Novonix share price? It’s up 408% in 2021.
Another tailwind for Novonix shares is the reshuffle in the S&P/ASX Indices announced by S&P Dow Jones a few weeks ago. That reshuffle sees Novonix join the S&P/ASX 300 Index (ASX: XKO), effective as of market open this morning.
Its inclusion in the ASX 300 may not directly impact retail investors. However, it will open the door to some institutional funds which are limited to investing in the top 300 ASX shares.
Novonix share price snapshot
It’s been a banner year for Novonix investors, with shares up 408% year-to-date and 72% in the past month alone.
By comparison, the All Ordinaries Index (ASX: XAO) is up 9% in 2021.
The steady run higher has seen Novonix’s market capitalisation exceed $2.4 billion.
Should you invest $1,000 in Novonix right now?
Before you consider Novonix, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Novonix wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
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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.