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Why is the Vulcan Energy share price up 8%?

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is streaking higher today as ASX lithium shares ride a new wave of momentum in August.

At the time of writing, the Vulcan share price is up 8.21% to $9.62. In earlier trading, it reached $9.88 — an 11.1% gain on the closing price yesterday of $8.89.

There’s been no price-sensitive news from Vulcan since its quarterly activities and cash flow reports were released on 28 July.

But everything is positive on the lithium front, with several developments giving investors renewed confidence in the sector this month. And Vulcan is among many ASX shares benefitting from that.

Let’s take a look.

Well, in short, they’re having a scorcher of a day.

Let’s survey what’s happening with the big names. At the time of writing:

The Lake Resources NL (ASX: LKE) share price is soaring 17.8% The Sayona Mining Ltd (ASX: SYA) share price is charging 10.4%The Core Lithium Ltd (ASX: CXO) share price is rising 4.8%The Allkem Ltd (ASX: AKE) share price is ascending 2.4%The Pilbara Minerals Ltd (ASX: PLS) share price is climbing 5.0%.

What’s spurring this share price growth?

A bunch of things. Let’s start with the latest news pertaining to lithium.

As my Fool colleague Bernd wrote this morning, China has reported record electric vehicle (EV) sales in June and is forecasting 84% growth for the 2022 calendar year.

The latest figures from the China Passenger Car Association (CPCA), as reported by Technode, revealed there were 571,000 EV sales in June, up 141% year over year.

For the full calendar year, CPCA is forecasting 5.5 million EV sales. That’s about a million more than the rest of the world’s EV markets combined.

Of course, lithium is a key ingredient in the batteries powering EVs. So, news like this is going to move ASX lithium share prices. But wait, there’s more.

This week the United States Senate passed a huge spending bill. By huge, we’re talking an eye-watering US$437 billion. But what’s significant is that almost 80% of it is earmarked for climate and energy spending. This includes dumping per-manufacturer limits for the US$7,500 tax credit for new EVs.

News like this supports ASX lithium shares because it’s a big demonstration of climate change action.

This action is allowing emerging sectors such as lithium to grow rapidly.

Vulcan share price snapshot

Over the past 12 months, the Vulcan share price has decreased by 37%. But over the past five years, it’s up — wait for it — 4,272%. No kidding.

Vulcan hopes to become a producer of high-purity lithium hydroxide for European EV manufacturers. Its Zero Carbon Lithium Project aims to produce both renewable geothermal energy and lithium hydroxide from the same deep brine source in the Upper Rhine Valley in Germany.

EV pioneer Elon Musk recently described lithium processing as “a licence to print money” at “software margins”.

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