Are you considering adding new stocks to your investment portfolio? Whether you’re new to investing or you have a solid portfolio already, there are ways to improve your stock options.
One area you may not have considered is electric vehicle (EV) battery stocks. With the number of electric vehicles already growing rapidly, it’s a great time to consider investing in this area.
But the savvy investor will look beyond the obvious choice to invest in EV companies and consider electric vehicle battery stocks. After all, electric vehicles will not run without batteries—and you can’t manufacture the batteries without specific materials.
Let’s take a look at why EV batteries are an excellent choice for investors. Next, we’ll talk about the industry’s market outlook and challenges. Then we’ll provide you with 11 of the best EV battery stocks to invest in today. Let’s get started!
Why Invest in EV Batteries?
Why are people looking to EV battery stocks? Investors know that the global automotive industry is unstable.
There is an enormous shift from fuel-guzzling vehicles to electric vehicles. Even if you don’t see many electric vehicles in your neighborhood today, that doesn’t mean you won’t in the next few years: the global EV market is projected to grow by 24.3% annually.
Like EV cars, EV batteries improve all the time. “Green” methods of transportation are always in demand, from the electric vehicles mentioned here to hybrid cars and scooters.
But when it comes to electric vehicles specifically, people are typically concerned with how far they can travel with a battery.
As a result, product research and development tend to focus on increasing energy density by packing more energy into the same volume. Otherwise, electric vehicles would need enormous, heavy batteries that could be difficult to move or carry.
What does all of this mean?
Essentially, EV batteries are here to stay. Technology is continuously improving, and these products will only grow in demand, making them a great investment option.
The outlook for this area is fantastic. In the United States, the Infrastructure Investment and Jobs Act was passed in late 2021 and aims to promote green transportation.
Many European and Asian countries have also adopted or are adopting similar legislation. China, in particular, has a good number of electric vehicle companies and battery companies.
Some companies supply EV batteries to swap or rent. This is called a “battery-as-a-service model” or BaaS. These types of business models will only increase the demand for batteries as the demand for electric vehicles rises.
Customers can essentially “lease” batteries as a separate component of a vehicle so that they can replace them or swap it as needed for a fee.
Some companies will replace batteries on a regular schedule. All this means is that more batteries will be needed to supply these business models.
Overall, the market outlook is excellent, with good battery manufacturers being plentiful in the U.S. and China.
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While EV vehicles intend to help relieve the burden of managing dangerous levels of fuel emissions, batteries aren’t without their disadvantages. In fact, some drawbacks have been downright dangerous, as you’ll see below!
One potentially harmful environmental effect of EV batteries is the waste they create when they get discarded. Lithium-ion batteries affect the quality of water sources and soil.
Additionally, some batteries still consist of lithium-ion, which requires nickel and cobalt, and the mining of one ton of lithium itself necessitates 50,000 gallons of water.
That’s hardly green. In fact, it’s expensive, and the water requirements have led governments in prime mining areas to restrict the mining of raw materials, particularly in Chile—historically, one of the best lithium mining sites.
And then, there is the issue of the instability of lithium-ion batteries, being toxic to the environment and volatile, and known to explode in vehicles. Lithium iron phosphate is much more stable in this area as well.
But most battery manufacturers are now moving toward lithium iron phosphate batteries. These batteries cost less to make, are more stable, and don’t require as many raw materials.
There are also companies looking into solid-state batteries, as they charge faster and are much safer than any lithium battery.
They are not currently manufactured at scale. However, as you will see in the list below, several corporations specialize in researching and designing solid-state batteries for electric vehicles.
These are still worth investigating, as solid-state batteries are likely the future power source of electrified transportation.
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Best EV Battery Stocks to Invest In
Now that you know why electric vehicle battery stocks are a great investment option let’s look at the pros and cons of the available stock options.
Not all of these companies are strictly battery stocks; some are integral parts of supply chains for battery production and distribution. Nonetheless, if you are interested in environmental or tech investing, these are all great electric battery stock companies and related stocks to consider.
1. Panasonic Corporation (OTCMKTS: PCRFY) – Best Level of Experience
Panasonic is a household name: We all know of Panasonic TVs and headphones. But the company also produces batteries for EV vehicles. In fact, Panasonic is currently partnered with Tesla for this reason.
Panasonic has over 40 years of experience in producing battery cells and systems. They currently supply lithium-ion batteries to many global automotive manufacturers. They also develop and mass-produce nickel-metal hydride (Ni-MH) battery cells for hybrid vehicles.
Because Panasonic has so many years of experience developing and supplying batteries for various electric and hybrid vehicles, this is a stable selection for your EV battery stock portfolio.
Panasonic deals with far more than just battery production. As mentioned above, the company also produces TVs, headphones, computer monitors, and other appliances.
Due to the breadth of their product line, their stock growth can flatten in accordance with slow sales in other areas. So while you are buying Panasonic stock to invest in batteries, growth may slow for unrelated reasons.
2. Solid Power, Inc. (NASDAQ: SLDP) – The Future of Electrified Transport
While we mentioned that solid-state batteries are in production, it is essential to note that they are not currently on the market at scale. Solid Power, Inc. is a frontrunner prepared to take on the challenge of delivering solid-state batteries for electric vehicles.
Solid-state batteries allow the use of high-capacity electrodes, which include lithium metal and high-content silicon.
They are produced using a solid layer rather than liquid and gel, which are the more volatile components of lithium-ion batteries.
They maintain high performance in hot temperatures and therefore maintain a longer life. As such, they are also more affordable.
Solid-state batteries will happen for vehicles in the future—now would be a great time to invest in this exciting technology.
Not everyone is on board with the idea of investing in solid-state batteries at this time. Because no real product is on the market yet, investing in Solid Power is like investing in an idea.
While we are confident solid-state batteries will be available for automobiles in the future, we cannot say for sure when this will happen. As such, these electric battery stocks may be riskier for some investors.
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3. Lithium Americas Corp. (NYSE: LAC) – Invest in the EV Battery Supply Chain
In a previous section, we talked about the issues with raw material mining, primarily lithium.
Lithium Americas Corp has 100% ownership of Thacker Pass, the largest lithium reserve in the United States, and nearly 50% ownership of Cauchari-Olaroz, a brine project.
The corporation supplies lithium to battery companies for manufacturing and has access to many materials reserves.
While this is not necessarily a pure EV stock, lithium is critical to the production of current generation EV batteries. It is an excellent option to add to your portfolio, particularly with its positive growth outlook.
As technology moves toward solid-state batteries, lithium-ion batteries will get phased out. Raw materials also fluctuate with the values of other metals, which could affect earnings.
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4. Albemarle Corporation (NYSE: ALB) – One of the Largest Lithium Suppliers in the World
Albemarle is another company that doesn’t manufacture EV batteries, but it is one of the largest lithium suppliers globally. It has operations in the US as well as Chile and Australia.
It also recently acquired the Chinese lithium converter firm Guangxi Tianyuan New Energy Materials Col, Ltd. In addition to lithium, Albemarle also supplies other refining catalysts, bromine, and bromine derivatives.
Because Albemarle has connections globally, they are in an excellent position to supply materials to electric vehicle and EV battery manufacturers. They are a good choice if you are interested in EV stocks but want to expand your investments beyond battery manufacturers.
As with Lithium Americas Corp., this company supplies lithium, used to make current generation batteries. It is prone to the same fluctuations in share value as other raw materials.
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5. QuantumScape (NYSE: QS) – Invest in The Future of EV Batteries
QuantumScape is a startup focusing on researching and developing all-solid-state batteries.
The solid-state battery that QuantumScape wants to create can charge in less than 15 minutes and is safer than lithium-ion.
It costs significantly less to manufacture due to eliminating anode host material and increasing energy density in the same way. This leads to a longer useful lifetime because there is no capacity loss at the anode interface.
All of this is technical, but suffice it to say that by eliminating some of the more troublesome materials, solid-state automotive batteries improve overall safety and decrease the cost of manufacture.
Solid-state batteries are the next big thing in EV battery technology, and if you want in on this exciting development, QuantumScape is worth consideration.
Because no solid-state batteries are being produced at scale, choosing to invest in QuantumScape is a little riskier.
6. LG Chem, Ltd (KRX: 051910) – The Hidden Gem with Surprising Power
LG Chem is a South Korea-based subsidiary of LG Corporation—yes, the same company that we know for its TVs, smartphones, monitors, and more.
You may not have heard of LG Chem, but it is one of the largest battery manufacturers globally. LG Chem supplies to major automotive companies such as General Motors (GM) and Ford.
LG Chem manufactures lithium-ion batteries and supplies battery packs for many electric vehicles. They are a quiet but good choice for electric car battery stocks. They are a stable subsidiary of the electronics giant LG and supply their products to enormous automotive companies.
LG Chem gets traded on the Korean market. This doesn’t exclude people from investing in it if they are not in Korea; however, it can be more complicated.
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7. Romeo Power (NYSE: RMO) – A Startup Worth Watching
Romeo Power is a startup founded by former Tesla and SpaceX engineers. They focus on the production of EV batteries and have a facility dedicated to manufacturing EV battery packs in Southern California.
They also do rigorous safety testing of their batteries. Although lithium-ion batteries have a contentious history with thermal events, Romeo Power aims to mitigate that. They conduct their own research and adjust designs based on the results.
In addition to creating batteries for standard vehicles, Romeo Power also designs and manufactures batteries for commercial vehicles. If you want to invest in electric car company stocks that focus on commercial vehicles, they are a great choice.
Because Romeo Power is a startup, its share value can fluctuate. It also doesn’t have the experience needed to hold value based on name alone.
8. Contemporary Amperex Technology (SHE: 300750) – The Best Coverage for All Electrified Transport
Contemporary Amperex Technology, or CATL, is a Chinese battery manufacturer. They produce lithium-ion batteries for electric vehicles, including standard and commercial vehicle models.
CATL’s passenger vehicle batteries increase energy density, efficiency, and storage. As a result, the batteries have a longer lifespan and mileage during usage.
Commercial vehicles using CATL batteries get used for express delivery, fresh food delivery, tourism, heavy-duty transport, construction, and street machinery.
There are battery-swapping services, which allow the driver to lease batteries so that they can take out discharged batteries and exchange them for a fully-charged one.
If you are interested in adding rising Chinese companies to your portfolio, CATL is definitely one you want to consider. They are one of China’s most extensive stocks and will only grow more.
When looking for valuable EV battery companies stocks, some are wary of investing in the Chinese stock market. It can be challenging to rely on government effects on the market, so it’s essential to keep this in mind.
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9. Freeport-McMoRan Inc (NYSE: FCX) – Invest in Copper
Freeport-McMoRan is one of the world’s largest gold, copper, and molybdenum mining companies. As such, it is one of the best EV battery stocks to invest in because of its raw material distribution. They have operations in North America, South America, and Indonesia.
Although they do not work with lithium as many of the other companies mentioned in this list, Freeport-McMoRan still works with materials used in EV batteries. As such, it is worth the consideration of adding to your portfolio.
Investing in raw materials can be volatile, so you should be aware of the challenges with investing in individual commodities before purchasing
10. Microvast Holdings, Inc. (NASDAQ: MVST) – Ultra-Fast Charging EV Batteries
Microvast Holdings develops and manufactures battery systems for passenger vehicles and commercial electric vehicles.
They also work with marine vessels, heavy-duty trucks, and railways. The company makes lithium-ion batteries in manufacturing bases in the United States, Germany, and China.
Their battery systems can be fully charged from 0-100% in 10-30 minutes, and longer battery life translates to more savings for customers. Microvast also offers customized battery solutions for clients, including cells, modules, and packs.
One of the primary items of interest is the company’s acquisition of a facility in Florida. This will be used for the future site of the company’s battery prototyping headquarters.
Its revenue has increased 20% year by year, with most sales in battery products to new customers. Microvast is set to grow in the coming years.
Microvast is a good EV battery company to invest in at its current valuation, as it is versatile and poised for solid growth, but it does lag behind its peers in overall value.
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11. Ganfeng Lithium (OTCMKTS: GNENF) – China’s Largest Lithium Compounds Producer
Ganfeng Lithium is a Chinese company focused on providing Lithium-ion batteries for electric vehicles, mobile phones, headphones, and more. They create batteries for consumer electronics, energy storage systems, and vehicles.
Although Ganfeng Lithium clearly specializes in its namesake (Lithium), it also works with solid-state batteries. The corporation focuses heavily on production, developing a chemical and lithium battery research center.
Here they cover research for synthesis, materials, smelting, alloy, power and energy storage, and battery recycling.
Even if you’re not really into the nitty-gritty details of battery development, suffice it to say that the company is set for growth through innovation and research. It’s a solid choice for your portfolio.
There are musings that this stock gets overvalued. However, its profitability still seems strong.