What happened

Thursday's looking like a strong day for lithium mining stocks. In early trading this morning, shares of Piedmont Lithium (NASDAQ:PLL), Lithium Americas (NYSE:LAC), and Orocobre Limited (OTC:OROCF) all charged ahead 12% or more on positive news flow in the lithium space.

A few hours later, Orocobre has given up most of its gains (yet is still up 3.4% as of 12:40 p.m. EDT), but Lithium Americas is hanging onto a 10.2% gain, and Piedmont is still up 12.8%.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

So why are lithium stocks up? There doesn't seem to be a clear-cut news driving any of these three specific stocks higher. Still, here's my hunch:

The supply agreement that Tesla signed with Piedmont Lithium earlier this week lit the fuse on shareholder interest in the sector. And yesterday, a report out on Australian stock market investing site Small Caps threw gasoline on the fire.  

As the site reports, "an authoritative Finnish-German study" has just come out that suggests the electric vehicle (EV) revolution could be closer than we thought. According to the study, authored by researchers at the University of Augsburg in Germany and Lappeenranta-Lahti University of Technology in Finland, the number of cars on global roads is likely to triple by 2050, rising from 1 to 3 billion vehicles -- and every one of these cars will be electric.

Tracing the evolution of the industry, the researchers see EVs owning 14% of the market by 2025, between 40% and 50% by 2030, and 100% by 2050.

Now what

It's hard to overstate the importance of this study if the researchers are right.

They may not be, but if they are, then the conversion of all 1 billion cars on global roads now to electric cars with rechargeable lithium batteries, and the addition of 2 billion new cars on top of that, "is going to place huge strain on lithium supply," reports Small Caps. At the same time, the study suggests that past estimates saying there's perhaps 80 million tons of lithium on Earth available for mining could be off by a factor of two -- and that there's actually only half that much lithium available.

In short, the study appears to be setting the stage for exploding lithium demand colliding with diminishing lithium supply. That might be bad news for backers of electric cars as the wave of the future, but it could be very good news for lithium stocks.

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.