Investors: Here Are 7 EV Battery Names Worth Considering

Nearly every legacy automaker in the world is now attempting to go electric in a race to dominate the growing electric vehicle (EV) market and establish itself as a top EV battery manufacturer.

Globally, car makers have electrified their lineups, with some only having a three-year window period to meet their milestones in time and draw further competition as EV adoption becomes more widely distributed across the world.

Despite seeing strong price appreciation due to supply chain constraints and increasing labor costs, the United States electric car market experienced more than double the number of EV sales in Q1 2023 compared to the same period last year.

Overall, EV sales were up by 66%, and pure electric vehicle sales grew to 7.1% of U.S. auto sales during the first quarter of the year.

Across the pond in Europe, sales of EV models have surged, with the overall market growing 13% year-over-year. Makers of electric cars, including Volkswagen Group, Tesla, Stellantis, Mercedes-Benz, and Hyundai-Kia now account for more than two-thirds of the total European market share.

Elsewhere in China, the country has now positioned itself as a leading player, exporting more than 680,000 EV units in 2022, and during the first half of the year, EV makers sold more than two million EVs. During the last several years, the country’s EV market experienced a 131% year-over-year increase in exports. Currently, China is responsible for roughly 60% of the global electric cars sold.

Competition is heating up, and from now through to 2026, more than 90 new EV models are expected to hit American roads according to recent forecasts by AutoForecast Solutions.

Investing in EV battery stocks

Investing in electric car companies is one way to profit from the booming market, as motorists and government authorities alike openly welcome the electric transition. While car makers continue to see growing sales and profits, another way to profit from the market is through electric car battery companies.

Battery companies supply perhaps the most important, and crucial component of electric cars, and is often considered to be the most expensive element of electric cars.

With the expectation that electric car sales will experience significant growth over the coming years, then it’s perhaps safe to say that EV battery companies could witness surging demand in the next few decades.

EV battery companies continue to invest heavily in the modification of their battery production, increasing their market presence through mergers and public offerings. This has become an exciting time for investors to leverage EV battery stocks and the companies helping to revolutionize the industry.

Here are seven electric battery stocks worth considering for investors.

Albemarle

The North Carolina-based chemical and manufacturing company, Albemarle (NYSE: ALB) experienced a strong first quarter of the year, with net sales of more than $2.6 billion, representing an increase of 129%. Overall, the company had a net income of more than $1.2 billion, or $10.51 per diluted share, which translated to an increase of 389%.

Albemarle is responsible for the sourcing and development of quality-grade lithium battery components, with a specialty in custom manufacturing of lithium carbonate, and chemical scale-up services for lithium hydroxide.

The company has witnessed strong growth due to the ongoing increase in EV batteries. Albemarle further specializes in the research and development of lithium-based products, and raw materials, making the company one of the most crucial components in the EV battery supply chain.

Panasonic

Technology development company, Panasonic (OTCMKTS: PCRFY) has a well-established relationship with Tesla and is a major supplier of batteries and related components for the EV automaker. There have been rumors in recent months that the company is now furthering its relationship with legacy automakers BMW and Toyota.

Most recent financial results show that the company experienced higher-than-expected sales and net income, due to an increase in sales for automotive batteries, which had a direct impact on the company’s quarterly performance. Overall, consolidated sales jumped by 3% during the first quarter of the year ending March 31, 2023.

Favorable partnerships with North American Hexagon Purus ASA, and Mazda Motor Corporation has helped the company further increase its presence in the EV battery supply chain and could help improve the research and development of EV batteries for these companies.

BYD

The Chinese EV manufacturer and maker of electric car batteries is an all-in-one company that designs and develops the majority of its EV components in-house. The company experienced strong financial performance during the last several months and currently makes up the majority of the Chinese New Energy Vehicle (NEV) market.

BYD (OTC: BYDD) reported Q1 2023 revenue jumping by more than 78% year-over-year, however, this is roughly 23% lower than Q4 2022. The company currently has a market capitalization of more than $103 billion, making it one of the biggest battery manufacturers and suppliers on our list, and perhaps in the world.

While BYD has reported strong and positive financial growth this year, it recently announced that it will scrap a $1 billion deal to develop EVs in India. This could potentially hurt their full-year guidance but could provide the company with the opportunity to develop EVs in other emerging markets.

Lithium Americas

Lithium Americas (NYSE: LAC) is a supplier and producer of high-grade lithium, one of the most important elements in electric car batteries. The Vancouver-based company currently has mines operating in Argentina and the United States and is currently aiming to extract more than 2.9 million metric tonnes of lithium by 2030.

The company is expected to split into two separate entities, with one branch remaining Lithium Americas, and the other becoming Lithium Argentina. The separation will help establish two independent companies, and two key players in their respective regions, helping to further increase their asset procurement in the coming years.

Back in January, the company entered into a purchase agreement with General Motors, whereby the legacy automaker agreed to make a $650 million equity investment in Lithium Americas. This would give GM exclusive access to Phase 1 production at the company’s Thacker Pass exploration plant, located in Humboldt County, Nevada.

NIO

NIO designs and develops next-generation technologies for autonomous vehicles, including digital software, and electric powertrains, and is an industry leader in BaaS or Battery as a Service, which allows consumers to switch out their motor batteries and other vehicle-related technologies.

While similar to BYD, the company sees several important components of its business, one being the production of EV powertrains, and its flagship, six-seater ES8 SUV. The company has established itself as a household name in the Chinese EV market and has started branching out to other EV markets across the world, including the U.S. and Europe.

For the three months ending June 2023, the company delivered more than 23,520 vehicles, while in June alone, NIO delivered more than 10,700 vehicles. As demand continues to grow, and more motorists are looking for affordable and reliable EVs, many will look to NIO for their needs.

Honeywell

Honeywell (NASDAQ: HON) might not be one of the most exciting stocks to invest in, and many investors are speculative over the company’s performance, calling stocks overvalued based on their three-year revenue growth rate of 1.1%.

The company is however a leader in applied sciences and industrial developments and has an edge over other battery stocks due to its diversified portfolio holdings. In terms of EV battery development, Honeywell provides sensor technology to help improve the safety of electric car batteries.

During the three months ending April 2023, the company reported sales up by 6%, with organic sales jumping by 8% for the same recorded period. Between 2017 and 2022, the company completed 16 acquisitions and five spin-off companies under the management of the new CEO and President, Vimal Kapur, the company has managed to further decrease spending and boost the development of its aerospace business segment.

Toyota

The Japanese automaker, Toyota (NYSE: TM) is a well-trusted household name in the auto industry. Earlier in the year, the company announced that it was not fully convinced that going all-electric would be part of its business strategy in the forthcoming years.

However, Toyota has been at work developing a solid-state battery, which could assist with the rollout of EVs globally, and further boost their research and development of EV-based products.

Although the legacy automaker is not throwing itself behind the EV boom, there’s a significant upside with its stock, and many Wall Street analysts have given the company a moderate Buy rating, despite it receiving some criticism for its position on production electrification. Nonetheless, Toyota is a safe, and reliable stock purchase for investors that are hoping to benefit from the development of solid-state batteries.

To conclude

Globally, electric vehicles are gaining increasing exposure to new market segments, as manufacturers continue to expand their influence, but also develop a better understanding of the future of electric cars.

While there is still a long way to go before we will see wide-scale EV adoption, electric car manufacturers and legacy automakers are helping to fuel the demand for EVs and further electrify future production lineups.

With EVs looking to become a more permanent installment on our roads, EV suppliers and builders are expected to be along for the ride for the long-term and could help investors profit from a different segment of the booming EV market.

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(Featured image by Kindel Media via Pexels)

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