It has been discussed for several years, and the expected lithium demand has arrived, bolstering the thesis for lithium-related equities. The Global X Lithium & Battery Tech ETF (LIT), the lone exchange-traded fund (ETF) dedicated to lithium stocks, is capitalizing on that trend.

Having debuted in July 2010, LIT was early to the lithium party, but various data points suggest that the ETF's existence is being validated this year. Amid surging lithium demand, LIT, which tracks the Solactive Global Lithium Index, is up about 48% year to date. That easily makes the fund one of this year's best-performing industry or sector ETFs. LIT has been impressive all year, but its recent performance is particularly noteworthy. The lithium ETF is up 16%, or one-third of its year-to-date gain, in just the past month. (See also: Lithium: Promising Commodity of the Future.)

Predictably, China is playing a pivotal role in lithium demand expectations. "On Saturday, Xin Guobin, China's vice minister of industry and information technology, said the government is working with regulators on a timetable to end production and sales of internal-combustion vehicles," reports Bloomberg. "The shift to electric vehicles is spurring a surge in demand for lithium batteries and the companies that supply the raw materials."

When U.S. investors think electric vehicles, they often think of Elon Musk's Tesla, Inc. (TSLA). Indeed, Tesla is extending its story stock status with a year-to-date gain of almost 70%. However, the stock is far from the most important driving force behind LIT's run. Tesla is LIT's fourth largest holding, commanding 5.7% of the fund's weight, according to issuer data. FMC Corporation (FMC) and Sociedad Química y Minera de Chile S.A. (SQM) are up 59% and 82%, respectively, year to date, and those two stocks combine for over 42% of LIT's weight. (See also: 3 Reasons to Buy Lithium.)

Long-term demand trends bode well for LIT investors. "Global revenue from lithium-ion battery sales is anticipated to post a compound annual growth rate of 43.1% in reaching a projected $36.5 billion by 2020," according to Global X research. Bolstering the case for LIT and lithium stocks is that it is not just electric vehicles driving demand for the commodity. "Lithium batteries are increasingly used in appliances like mobile phones and smartphones," according to Global X Research. "By 2020, 70% of the world's population is expected to use a smartphone. With smartphone usage increasing exponentially, the demand for lithium batteries is expected to be propelled further."

Investors have added $263.1 million to LIT this year, a significant percentage of the ETF's $472.5 million in assets under management. (See also: Why Is It Difficult to Profit From Lithium Demand?)