Are Yamaha and Toyota about to upend the ASX lithium share party?

ASX lithium shares have been amongst the top performers over the past 12 months.

Just have a look at the returns from these top ASX lithium shares since this time last year:

• Allkem Ltd (ASX: AKE) shares up 73.0%
• Core Lithium Ltd (ASX: CXO) shares up 368.6%
• Latin Resources Ltd (ASX: LRS) shares up 200.0%
• Lake Resources N.L. (ASX: LKE) shares up 147.5%

I’ll go out on a limb here and say you likely wouldn’t object to having held these ASX lithium shares in your portfolio over the year gone by. A year that saw the All Ordinaries Index (ASX: XAO) lose 6.2%.

What’s driving the big gains?

ASX lithium shares have been big winners from soaring lithium prices.

The lightweight, highly conductive metal is a core element in EV batteries. And with global EV markets booming, and widely expected to continue booming as the world transitions away from fossil fuels, lithium prices hit new record highs this year. And lithium continues to trade within a whisker of those records.

But there’s a reason I italicised ‘expected’ in the paragraph above.

Lithium prices, and ASX lithium shares, have been making hay on the expectation that EVs represent the future of 21st-century transport.

But what if those expectations prove premature?

Could Yamaha and Toyota upend the ASX lithium share party?

There’s little doubt that the world will continue to move away from fossil fuels.

But lithium-ion battery powered vehicles aren’t the only potential alternative low-emission fuel source.

As The Motley Fool reported in August, Porsche is among the car manufacturers working on hydrogen combustion engines. These are not hydrogen fuel cell vehicles, which have similar characteristics to EVs. We’re talking about proper combustion engines fuelled by hydrogen.

And Porsche is far from alone in potentially upending the party for ASX lithium shares.

As Ride Apart reports, Yamaha Motors and Toyota are collaborating on a hydrogen combustion engine “focused on sustainability and performance”.

Toyota has awarded Yamaha the contract to develop a new 5.0-litre V8 internal combustion engine that runs on hydrogen. Alongside other Japanese car manufacturers, Toyota is actively investigating how to increase the variety of sustainable fuel options for combustion motors.

Commenting on the hydrogen motor project, Yamaha Motors’ president Yoshihiro Hidaka said:

We are working toward achieving carbon neutrality by 2050. At the same time, ‘Motor’ is in our company name and we accordingly have a strong passion for and level of commitment to the internal combustion engine.

With plenty of drivers the world over sharing that passion for the internal combustion engine over battery power, ASX lithium shares could be in for some hydrogen powered headwinds.

The post Are Yamaha and Toyota about to upend the ASX lithium share party? appeared first on The Motley Fool Australia.

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More reading

• Broker tips 100% upside for Lake Resources share price
• Top broker tips 25% upside for Allkem share price
• ASX lithium stocks are ‘the buy now, pay later of 2022’: expert
• Here’s the lithium price forecast through to 2024
• Investors are obsessed with ASX lithium shares, but what about this other critical battery metal?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 Scott Phillips.

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