What happened

Shares of profitless, revenue-less lithium miner Lithium Americas (NYSE:LAC) are up a strong 16.1% as of 11:40 a.m. Monday morning. Curiously, there doesn't appear to be any news pertaining to Lithium Americas in particular.

There is, however, a new report out on the state of global lithium supply and demand from mining research and consultancy group Wood Mackenzie.  

Lithium salt evaporation ponds

Image source: Getty Images.

So what

As reported on OilPrice.com over the weekend, Wood Mackenzie just prepared a report on the likely demand for lithium that will be created if the electric car industry grows as expected over the next five years.

According to the analyst, the world needs to be producing about 800,000 tons of Lithium Carbonate Equivalent (LCE) annually by 2025 in order to meet demand for electric cars, and also limit global warming to no more than 2.5 degrees Celsius over pre-industrial-age temperatures. The analyst puts this into context by saying that the additional production needed is equivalent to the current production of "eight mines the size of Glencore's Katanga."

Cobalt production will also need to double by 2025 under the analyst's forecasts, and nickel production must rise 25%.

Now what

Why is this significant for Lithium Americas investors? Currently, despite the name, Lithium Americas isn't actually producing lithium at commercial quantities. But the company has two mining projects under construction, one in Nevada and a second in Argentina. Once up and running, therefore, these projects promise to help solve both the global production problem Wood Mackenzie identifies Lithium Americas' own problem -- that is, the lack of revenue and profits.

Investors today seem excited by the prospect.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.