Categories: Energy Stocks
Topics: Investing in Energy

Unleashing the Power: Top EV Battery Stocks for 2024

As the world witnesses a historic shift from traditional internal combustion engines to the electric vehicle (EV) era, the demand for batteries is soaring. This transition, still in its early stages, is marked by uncertainties in the battery supply chain, leading many companies to consider constructing their own battery gigafactories or forming joint ventures. 

In this article, we delve into 10 of the best EV battery stocks to consider as we enter 2024. These stocks present compelling investment opportunities in the dynamic EV battery market alongside industry giants like General Motors (NYSE: GM), Tesla (NASDAQ: TSLA), and Honeywell International (NASDAQ: HON).

Check out our latest free research reports for in depth analysis on specific market trends. View Reports

Global EV Market Trends

According to the International Energy Agency (IEA), Electric Vehicles (EVs) are projected to constitute 18% of the global vehicle market in 2023, with 14 million sales. The first half of 2023 has already seen a robust 25% year-over-year increase in EV sales, with Battery Electric Vehicle (BEV) sales experiencing a remarkable 52% surge in the second quarter. 

Global Lithium-ion battery cell demand by region graph

McKinsey predicts substantial growth in battery demand, reaching nearly 4,500 gigawatt-hours annually worldwide by 2030. This increasing demand for batteries creates significant potential for EV battery stocks to thrive and generate long-term returns.

Benefits of Investing in EV Battery Stocks

Investing in EV battery stocks offers a myriad of benefits. For starters, the electric vehicle market is on a steep growth trajectory, driven by increasing consumer awareness about environmental sustainability and government incentives promoting the use of electric vehicles. Consequently, the demand for EV batteries, the core component of these vehicles, is expected to surge, offering significant growth opportunities for investors. 

Secondly, continuous advancements in battery technology, such as the development of solid-state batteries, are set to improve the performance and cost-effectiveness of electric vehicles, further enhancing the attractiveness of this sector.

Lastly, many EV battery companies are also expanding into energy storage solutions, creating additional revenue streams. With these factors in mind, investing in EV battery stocks could provide substantial returns for forward-thinking investors.

Risks of Investing in EV Battery Stocks

However, like any investment, pouring capital into EV battery stocks isn't without its risks. For example, the EV battery market is highly competitive with numerous players vying for a piece of the pie. This could lead to price wars, which can erode profit margins. Additionally, the sector is heavily dependent on regulatory policies and government subsidies, which can fluctuate and impact market dynamics adversely. 

There's also the risk associated with technological advancements; rapid changes in technology can render existing products obsolete, leading to financial losses. Furthermore, the sourcing and disposal of raw materials used in batteries could pose environmental and ethical challenges, potentially leading to stricter regulations, public backlash, or increased costs. Thus, while the EV battery market presents considerable growth potential, investors should balance this with the inherent risks and uncertainties.

Despite these risks, I still believe it’s a good time to invest in key EV battery stocks like the ones I outline below.

Check out our premium publications for more trading recommendations and exclusive coverage on the markets. View Publications

The U.S. EV Market

Electric Vehicle sales chart

In the United States, EVs represented approximately 7.2% of total vehicle sales in the first half of 2023, indicating substantial growth potential. Forecasts suggest a resurgence in sales from 2025 to 2030, challenging previous expectations of a plateau in 2024. As the U.S. government and states continue to push for stricter emissions regulations and incentives for electric vehicles, the EV market is poised for continued growth.

Solid-State Batteries and the Future

While lithium-ion batteries remain central to the EV industry, concerns about toxicity and safety have sparked interest in solid-state batteries. These batteries offer enhanced energy density and performance by replacing the liquid electrolyte with a solid conductor, improving current flow. 

As technology advances, solid-state batteries are expected to play a significant role in the future of EVs, offering increased range, faster charging times, and improved overall efficiency. The development and adoption of solid-state battery technology present exciting opportunities for investors in the EV battery sector.

Lithium Battery Stocks for the EV Revolution

  • FREYR Battery (NYSE:FREY): FREYR Battery is engaged in battery cell manufacturing for energy storage, electric mobility, and marine applications globally. The company has received optimism from 18 hedge funds, with Encompass Capital Advisors leading in investment.
  • Enovix Corporation (NASDAQ:ENVX): EEnovix Corporation is a leader in silicon-anode lithium-ion batteries and has attracted investments from 20 hedge funds.
  • Sociedad Química y Minera de Chile S.A. (NYSE:SQM): SQM is a Chilean chemical company specializing in lithium production and is backed by 24 hedge funds.

Solid State Battery Stocks Poised for Growth

  • Solid Power, Inc. (NASDAQ:SLDP): Headquartered in Colorado, Solid Power specializes in automotive parts and solid-state battery technologies. The company has experienced substantial growth, with revenue reaching $4.9 million in Q2 2023. Backed by 16 hedge funds, Citadel Investment Group holds the largest stake in the company.
  • QuantumScape Corporation (NYSE:QS): QuantumScape is dedicated to solid-state lithium-metal batteries and has demonstrated promising advancements in cell tests. The company has garnered interest from 17 hedge fund investors with Coatue Management holding the largest position.
  • Toyota Motors (NYSE: TM): Toyota Motors (TM) has taken a unique approach among its peers in the auto industry. Rather than partnering with battery tech startups, the corporation has chosen to aggressively pursue the development of future-proof batteries. To this end, Toyota has dedicated a massive $13.6 billion to research and development of solid-state batteries throughout this decade, marking a significant commitment to innovation in this area.

As we enter 2024, these EV battery stocks, along with industry giants, present compelling investment opportunities in the dynamic EV battery market. With continued advancements in solid-state battery technology and increasing government support for electric vehicles, these stocks are likely to witness further growth and demand in the future. 

Investing in EV battery stocks may prove to be a wise decision for long-term investors looking to capitalize on the ongoing EV revolution.

Keep an eye on these companies as they continue to make strides in developing more advanced and efficient battery technologies, shaping the future of the electric vehicle industry.

Keep coming back,

Chris Curl

Chris Curl
Editor, Daily Profit Cycle