ASX lithium shares have been some of the best-performing companies on the exchange over the past year.
For example, the Pilbara Minerals Ltd (ASX: PLS) share price is up 61% over the past 12 months, and the Allkem Ltd (ASX: AKE) share price has also gained 61%.
Over that same period, ASX lithium share star performer Core Lithium Ltd (ASX: CXO) has leapt 299% higher.
And this over a year that's seen the All Ordinaries Index (ASX: XAO) fall 7%.
But the good times for ASX lithium shares may not be over yet.
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World's fifth largest economy to go full EV
If the US state of California were a nation, its 2021 GDP of US$3.4 trillion (AU$4.9 trillion) would make it the fifth largest economy in the world.
With more than 39 million people, California is the most populous US state. And its government has announced that by 2035 all new vehicles sold in the state need to be powered by electricity or hydrogen.
In a state that sells some two million new vehicles each year, according to autoblog, that represents a big boom for EV sales down the road. In the first half of 2021, EVs made up around 15% of total new vehicle sales in California.
The pending shift looks like it will offer some potentially healthy tailwinds for ASX lithium shares, supplying the crucial conductive metal for the vehicles' lithium-ion batteries. Especially as a number of other states are expected to follow suit.
The first phase of the EV shift in California commences in 2026.
ASX lithium shares well positioned to help drive the change
Rick Duke, the US deputy special envoy for climate, has been in Australia this past week meeting with federal climate change officials.
And Duke had some encouraging words for Australian companies involved in helping the globe transition away from fossil fuels, like ASX lithium shares.
According to Duke (courtesy of The Australian Financial Review), "Australia is… perfectly positioned to be a part of that effort for critical minerals and electric vehicles and other application in the whole clean energy transition,"
The rapid growth of EVs and grid storage has also just seen Swiss investment bank UBS upgrade its lithium price forecasts, as it reiterated its overweight recommendation for global and ASX lithium shares.
According to UBS analyst Levi Spry (quoted by The Australian):
We have revised spodumene prices up from US$800 to US$1,100 a tonne, battery grade lithium carbonate up from US$13,000 to US$15,000 a tonne and battery grade hydroxide prices up from US$14,500 to US$16,000 a tonne…
We see supply growth coming from both brownfield expansions and new greenfield projects but at higher cost and risk, underpinning our higher long-term prices.
UBS forecasts that global demand for lithium will rocket 700% by 2030.
That outlook will certainly be welcomed by ASX lithium shares.
