The push towards electrification and decarbonization has never been more apparent. With governments and international institutions on the same page as climate change activists, the targets collectively set seem almost like an inevitability. One area where we see this trend clearly reflected is in the growth of electric vehicle battery companies in recent years. What was once considered an unfeasible niche technology has seen rapid development and is on the verge of taking over the mainstream. With this growing momentum in this area of high promise, investors are faced with a stellar opportunity to gain big.
Any market participant with some degree of foresight would confirm that riding this wave would result in monumental growth in the foreseeable future. This article aims to shed light on some of the most promising names within this domain. These five EV battery stocks are the best picks you could go with to ensure stellar capital growth.
Lithium Americas Corp
Up first is the Canadian emerging star, Lithium Americas Corp., (NYSE: LAC). The company is based in Vancouver, Canada, and currently oversees projects in both Nevada and the Argentinian province of Salta. LAC is crucial in the EV battery market, as it supplies lithium, a critical component in EV battery technology.
LAC is a great example of how the EV industry has outperformed the wider market, amidst the wider uncertainties that have caused even giant corporations to plummet. Where the wider S&P 500 fell by almost 8% in the last 12 months, LAC climbed by an impressive 70%. This was in large part due to the fact that LAC supplies predominantly to firms developing EV batteries. Although this growth eventually flattened out, there is ample reason to anticipate an oncoming growth surge.
The state of California recently introduced a lithium tax for all producers operating within the state. California presently holds most of the renowned lithium companies, which could see EV battery prices surging in the future. Lithium Americas, however, which holds its American facility in Nevada, turns out to be one of the few companies to avoid this significant tax. As a result, EV battery producers are likely to turn to LAC, in order to maintain their cost advantage. LAC stands positioned to see a huge wave of demand, as a result.
For investors looking to get in on the EV battery growth wave, LAC is a great starting point for portfolios. As a critical supplier to the industry with a heavy competitive advantage, the stock is likely to soar and would easily make its place in top EV stocks.
Next up on our list is FREYR Battery (NYSE: FREY), which is based in the Western European country of Luxemburg. If there was one stock you’d bet on as a future global leader in the EV battery market, we’d urge you to go with FREY. FREY stands as perhaps one of the most ideally positioned stocks to capitalize on the EV battery boom that will inevitably take place.
The core competitive advantage that FREY holds lies in its technological differentiation through the use of its sophisticated and innovative manufacturing approach. The company uses the 24M technology approach in developing EV batteries, which keeps its battery prices competitive, yet simultaneously makes its products some of the greenest and most sustainable across the market. The technology was the product of a spinoff by researchers at MIT, which was later acquired by FREY.
In addition to the disruptive innovation that the company benefits from, it also has one of the most optimal and sustainable locations. With its facilities based in Europe, the company is ideal in terms of its supply chain, when catering to one of the largest EV battery markets. European market participants have emphasized the need for European supply chains, as opposed to a reliance on Asia-based suppliers. This further adds to the cost-benefit associated with FREY and makes it a great pick in the wider context of Europe rethinking its energy security strategy.
Although the company has focused primarily on research and development yet and is still in its pre-revenue phase, analysts anticipate a growth explosion to be imminent. According to analyst consensus, the company will deliver annual revenue of $8 million by the end of the year, which will then grow up to $2.3 billion by the end of 2025. This upward potential of such magnitudes remains highly impressive.
A stock with so many positives, and so ideally positioned can only reach for the skies and it would remain in top EV stock for the long run. FREY is a great buy for any investor looking to gain from the EV battery sector.
Up next, we present the global specialty chemical giant, Albemarle Corporation (NYSE: ALB). As a lithium supplier, Albemarle caters to several different domains within the market, yet its segment which supplies components to EV batteries remains the most attractive. ALB is poised to dominate the EV battery space on account of the cost advantage it holds, as a result of its diverse portfolio of lithium derivatives. Due to this, the company’s business is well hedged against the volatilities of the wider lithium market. This is what makes Albemarle a great choice for EV battery makers, who prefer to maintain cost-effectiveness for its end consumers.
This business strategy has enabled ALB to see spectacular growth in recent years. In just the first quarter of 2022, the company achieved an incredible 165% earnings growth. It had managed to deliver earnings per share of $2.38, against the analysts’ expectations of $1.65. In addition to delivering you exposure to the booming EV battery market, ALB is also great for those looking for profit distributions. The company has increased its dividend payments without fail, for the last 25 years, in a consecutive manner. This is also a testament to the improving profitability the company has enjoyed over the years. With the burgeoning EV battery market, there is no stopping ALB from its growth ambitions.
The fourth stock on our list is the king of this domain itself, Tesla Incorporated (NASDAQ: TSLA). Tesla, under the leadership of the internet’s favorite billionaire Elon Musk, has been known for its innovation-oriented business approach. The company has not just been at the forefront of revolutionary electric vehicle design but has also made huge strides in battery chemistry. To further reinforce the company’s interest in taking the lead in the EV battery space, we look to its agreement with the Chinese battery cell producer, Gotion High-Tech, in late 2021. Moreover, a similar agreement was entered into with the Australian graphite miner, Syrah Resources.
While these agreements are promising, the most significant for Tesla has been its partnership with the Michigan startup, Our Next Energy. The company installed its prototype battery into the Tesla Model S, which allowed it to drive a whopping 750 miles without the need for a recharge.
These series of moves indicate that Tesla is fully aiming to take EV battery technology to the next level, and in the process, establish itself on the EV throne, by conquering every domain. Buying TSLA now could likely result in a highly robust portfolio in the future. The company is presently considering a three-for-one stock split, making its stock far more accessible to every participant in the financial market.
The final stock on our list, yet far from being the least is the globally renowned Japanese electronics company, Panasonic Corporation (OTC: PCRFY). Panasonic is most well-known for its household electronic appliances and other devices. Few however know that the company is one of the most significant names in the EV battery space.
Panasonic is in fact an EV battery supplier to Tesla itself, which tells us the standard of battery the company is working with. The Panasonic management has recently revealed its strategic goals of further driving down costs of its EV batteries, which would ultimately result in its market share expanding significantly. In this spirit, the company owns a 49% stake in its joint venture with Toyota motors, in its efforts to develop prismatic, lithium-ion batteries.
In the second quarter of 2022, Panasonic’s automotive segment, through which it supplies its EV batteries, saw an almost 30% year-on-year increase. This points to the financial promise that the company’s EV battery technology holds. It already enjoys the advantage of its globally renowned brand image, which eases with market penetration.
Given all these points of strength, we here at Stocks Telegraph are confident about the potential Panasonic holds in the EV battery sphere. For anyone aiming to ride the EV battery boom, Panasonic is a must-have for your portfolio.
The EV battery market is at the forefront of the global transition towards electrification and decarbonization. For this reason, the market has been quick to restructure itself along these lines, with demand for these stocks seeing a spectacular rise. As EV batteries continue to become more energy efficient and less costly, their market growth potential surges. Each of the stocks mentioned contains an immense financial promise, and each is uniquely well-suited to see stellar growth in the short to long-term future. This class of stock offers unparalleled growth opportunities, which would enable investors’ portfolios to fly high in the short to long-term future.