Six Electric Vehicle Battery Shares to Invest in by 2024's Edge
Six Electric Vehicle Battery Shares to Invest in by 2024's Edge
The automotive sector is transitioning towards electrification. Leading manufacturers like Tesla, Rivian, Ford, General Motors, Volkswagen, and Daimler are actively investinor developing or selling electric vehicles (EVs).
Tesla, with a temporarily decreased stock value (-4.95%), is a trailblazer in this shift. Rivian, despite a slight dip (-2.78%), shipped its first delivery of electric trucks in 2021 and is ramping up production aggressively. Traditional automakers, including Ford, General Motors, Volkswagen, and Daimler, are also working diligently to boost EV production and profitability.
A significant challenge for automakers in this transition is profitability. Both Ford and General Motors had to reduce production in 2024 due to the inability to lower the price of their EVs sufficiently to stimulate demand. A primary expense for EVs is the battery, and Ford has postponed the production of its F-150 Lightning to 2027 to leverage more affordable battery technologies.
There's a notable demand for EVs at an affordable price point. Forward-thinking investors can capitalize on this demand by scrutinizing companies that manufacturer EV batteries, the most crucial and costly components of EVs. If EV production increases significantly over the next decade, the demand for EV batteries will surge similarly.
Major producers are pouring substantial investments to meet the demand for high-capacity and low-cost batteries. Emerging battery technology startups, some of which are going public via special purpose acquisition company (SPAC) mergers, are pioneering revolutionary energy storage systems that could drastically alter the industry. This is an opportune moment to explore investing in EV battery stocks.
The 7 Leading
7 Leading Electric Vehicle Battery Stocks in 2024
Toyota Motor (NYSE:TM)
The following are the top EV battery stocks for investors to investigate:
$279.8 billion
| Company | Market Cap | Description || --- | --- | --- || Toyota Motor (NYSE:TM) | $279.8 billion | A prominent global vehicle manufacturer pioneering its own battery technology || BYD (OTC:BYDD.F) | $115.5 billion | A vertically integrated EV manufacturer and component supplier, including batteries || Albemarle (NYSE:ALB) | $13.06 billion | A top provider of battery-grade lithium || Panasonic (OTC:PCRFY) | $22.93 billion | A prominent Japanese conglomerate and Tesla's battery supplier || QuantumScape (NYSE:QS) | $2.78 billion | An early-stage company innovating solid-state battery technology || FREYR Battery (NYSE:FREY) | $237 million | A fledgling development company constructing battery factories || Solid Power (NASDAQ:SLDP) | $222 million | A company developing revolutionary solid-state battery technology |
One of the largest car manufacturers in the world developing its own battery technology
1. Toyota Motor
Although Toyota is a frontrunner in the auto manufacturing world, it lags behind in the EV space. Toyota's strategy to catch up encompasses in-house battery development and manufacturing.
BYD (OTC:BYDD.F)
In early 2024, Toyota acquired its battery joint venture with Panasonic, now known as Toyota Battery, allowing for an enhanced focus on fully electric vehicle (FEV) production. Toyota is also working on solid-state battery technology, aiming to start its production in 2026. Solid-state batteries could provide added benefits, such as expanded range and quicker charging times.
$115.5 billion
While smaller companies may face challenges, Toyota has a considerable advantage due to its well-established and profitable auto manufacturing business. It can support the cash demands of the development process with its substantial revenue streams. Should Toyota emerge as a full-fledged EV battery manufacturer, it will be well-positioned to ensure a profitable integration with its popular vehicles.
A vertically integrated manufacturer of EVs and components, including batteries
2. BYD
BYD is a major EV company based in China, manufacturing and distributing EVs, buses, trucks, and monorails. As a vertically integrated company, BYD also produces the batteries, semiconductors, and other components used in its EVs.
Albemarle (NYSE:ALB)
Warren Buffett's Berkshire Hathaway (BRK.A -0.39%)(BRK.B -0.56%) has played a significant role in BYD's history, initially purchasing shares in 2008. Buffett later reduced Berkshire's stake in BYD in late 2022 and early 2023 due to the company's share price appreciation.
$13.06 billion
BYD's EVs have emerged as popular choices in China, with the company ranking first in five of the top 15 new energy vehicle sales. BYD is the global leader in battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) manufacturing by a significant margin, selling more than double its closest competitor in both categories. This market dominance has greatly contributed to the growth of BYD's battery business.
A top producer of battery-grade lithium
Lithium market fluctuations result in phases of substantial revenue and profit growth, followed by cost-cutting periods. In 2024, experiencing low lithium prices, Albemarle was compelled to trim down on operational expenses and investment in capital projects to contend with market sluggishness. This strategic move will significantly enhance the company's financial stability and facilitate a swift rebound when prices surge again.
The anticipated increase in electric vehicle (EV) sales over the subsequent decade could pave a sustained upward trajectory for Albemarle. The company's operations in Chile and Australia confer competitive advantages, allowing it to manufacture lithium at a cheaper rate than rivals, ensuring profits in lean times and maintaining competitiveness during price spikes.
Panasonic (OTC:PCRFY)
4. Panasonic
$22.93 billion
Panasonic, a prominent Japanese conglomerate, contributes significantly to the EV battery market and has collaborated with Tesla for several years. Their partnership started with a supply agreement in 2009, although Panasonic is no longer Tesla's sole battery supplier. Regardless, the company continues to manufacture batteries for Tesla through their Nevada "gigafactory" joint venture.
A Japanese conglomerate and battery supplier to Tesla
In 2021, Panasonic expanded battery production in Nevada by constructing a new production line, and in 2022, it started constructing another factory in Kansas, scheduled to commence operations in 2025. The company is striving to enhance production capacity at its Japanese battery factory by installing novel equipment to meet Tesla's increasing demands.
Panasonic's partnership with Tesla might not endure indefinitely. The company is seeking to diversify its supplier partnerships, including collaborating with Lucid at the end of 2022 and securing deals with Subaru and Mazda in 2024. Panasonic is well-equipped to serve as a major EV battery supplier to prominent automakers, despite not being a dedicated EV battery company.
QuantumScape (NYSE:QS)
5. QuantumScape
$2.78 billion
QuantumScape is focusing on developing solid-state battery technology to boost EV range and quicken recharge rates. An American company, QuantumScape is only starting to test its battery technology on a large scale. It aims to manufacture over 200,000 batteries annually, but as of now, it doesn't produce any income.
An early-stage company that develops solid-state battery technology
QuantumScape is heavily investing to bring its technology to market. In 2022, the company delivered its initial prototype battery samples to EV automakers, which have reportedly performed well, resulting in positive feedback from manufacturing partners. QuantumScape is now working on developing manufacturing processes and materials to manufacture batteries at scale.
While the company believes it has sufficient financial reserves to support several more years of development and testing, investing in QuantumScape is risky. It's currently pre-revenue, and its management does not anticipate generating substantial commercial sales until 2026. There's a risk that its technology may fail or be a commercial flop, causing its stock value to plummet. However, this is a promising EV battery company with substantial growth potential if its research and development eventually bear fruit.
FREYR Battery (NYSE:FREY)
6. FREYR Battery
$237 million
Norwegian company FREYR Battery is another early-stage developer working on battery technology and manufacturing processes. It went public via a SPAC merger in the summer of 2021, aiming to establish itself as one of Europe's leading battery companies for EVs and energy storage systems.
An early-stage development company building battery factories
At the end of 2023, FREYR redomiciled to the US from Luxembourg. The shift is expected to have no impact on its European strategy, but it may open the door to receiving more US government incentives and potential stock inclusion in more index funds.
Like other start-ups on this list, FREYR's future is uncertain. It has yet to generate revenue and incurs operating losses while pursuing battery manufacturing agreements. The company expects its first revenue in 2025 after optimizing its spending and liquidity to ensure ample cash runway through 2027.
Solid Power (NASDAQ:SLDP)
7. Solid Power
$222 million
Solid Power develops solid-state battery technology and became a publicly-traded company through a SPAC merger in December 2021. Unlike QuantumScape, Solid Power intends to license its designs or sell its solid electrolyte for use in other battery manufacturers' production. Its technology is compatible with existing systems, which could accelerate deployment in the market.
A company developing solid-state battery technology
In 2024, Solid Power won a $50 million grant from the US Department of Energy for producing its electrolyte materials for solid-state batteries. The award should bolster its cash runway, as its revenue from partners started to decrease in the second half of 2024.
By 2026, Solid Power aims to expand its electrolyte production capacity by 150%, reaching 75 metric tons. By 2028, it could produce 140 metric tons. With backing from Ford and BMW, it should have customers lined up for its batteries if it can meet its timeline. However, there is a risk that its technology may not live up to expectations or that competitors may create a better product within that timeframe.
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Maximizing Growth Opportunities
Batteries are integral to electric vehicles (EVs). As sales increase, this will result in higher battery sales, benefiting those focused on producing them. Forward-thinking investors may want to add battery manufacturers to their portfolio to potentially capitalize on this trend. Keep in mind that investments in an emerging technology may experience above-average volatility.
Q&A
EV Battery Shareholder Inquiries
Is there stock for companies producing electric vehicle batteries?
Indeed. A wide range of companies specialize in the production of electric vehicle batteries. Some prominent names include Panasonic, QuantumScape, Solid Power, and FREYR Battery.
What's the best stock to purchase for electric vehicles?
Determining the best stock to invest in depends on your specific goals and risk tolerance. If you're interested in automakers, consider BYD, a leading electric vehicle manufacturer, which has received backing from Warren Buffett's Berkshire Hathaway.
If you wish to explore opportunities deeper into the supply chain, consider Albemarle, a company that provides the raw components for EV batteries, and Panasonic, which manufactures batteries themselves.
Who takes the lead in EV battery production?
Contemporary Amperex Technology Ltd, commonly known as CATL, holds the largest market share in EV battery production. Roughly 37% of the market share was covered by CATL in the first half of 2024, and the company has an extensive list of high-profile clients, including Tesla, BMW, Toyota, and Honda.
What are the top three EV stocks?
The top EV stocks depend on your specific goals and risk tolerance. For automakers, BYD is an industry leader in electric vehicle manufacturing, making its stock appealing to investors. Further up the supply chain, consider investing in a lithium supplier like Albemarle, and battery manufacturer Panasonic.
Adam Levy holds no position in any of the mentioned stocks. Our Website has positions in and recommends Berkshire Hathaway and Tesla. Our Website endorses BYD, General Motors, and Volkswagen Ag and suggests the following options: long January 2025 $25 calls on General Motors. Our Website adheres to a disclosure policy.
Given the text provided, here are two sentences that contain the words 'finance', 'money', 'investing':
- Forward-thinking investors can capitalize on the notable demand for EVs at an affordable price point by scrutinizing companies that manufacture EV batteries, the most crucial and costly components of EVs.
- If EV production increases significantly over the next decade, the demand for EV batteries will surge similarly, making it an opportune moment to explore investing in EV battery stocks.