With electric vehicle (EV) demand set only to accelerate, EV battery companies are struggling to keep up with demand. In fact, according to Fast Markets, “Squeezed supply chains and looming shortages of critical metals which are key for battery manufacturing present a major risk for the energy transition as we head towards 2030.” All of which is a strong catalyst for EV battery stocks.
Even Stellantis (NYSE:STLA) CEO Carlos Tavares once said he “expects a shortage of EV batteries by 2024-2025, followed by a lack of raw materials for the vehicles that will slow availability and adoption of EVs by 2027-2028,” as noted by CNBC.
Still, the EV battery industry could be worth $194.8 billion by 2032, says Acumen Research from $41.4 billion in 2022 — all thanks to accelerating EV sales. That said, investors may want to consider EV battery stocks for their portfolios.
Battery Stocks: Syrah Resources (SYAAF)
China — which controls about 90% of global graphite supply — is about to curb its exports. That could put a dent in the EV market. After all, graphite is a key EV battery component. This development could force EV companies to hunt for graphite elsewhere. That’s where companies, such as Syrah Resources (OTCMKTS:SYAAF), a Tesla (NASDAQ:TSLA) supplier, may be able to help.
China’s actions come just days after the U.S. tightened its controls on advanced semiconductors exports to the country. As noted by the U.S. Bureau of Industry and Security, “The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) released a package of rules designed to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including the PRC.”
Albemarle (ALB)
Lithium stocks, like Albemarle (NYSE:ALB), are just as attractive. The substance — another key EV battery component — contends with massive supply-demand issues.
In fact, referring back to Tavares, even he believes there’s just not enough lithium supply to go around. Worse, lithium producers have been warning they may not be able to meet “the world’s aggressive electrification guidelines,” as noted by Reuters.
Even Morningstar is bullish on lithium miners. Not only does the source see lithium demand passing a million metric tons in 2024 (up from 800,000 in 2022), they don’t see any supply surplus. That’s another positive for lithium stocks, like ALB.
In addition, ALB is technically oversold at $139.24. It’s also over-extended on RSI, MACD, and Williams’ %R, and is slowly starting to pivot higher. Better, as we wait for ALB to recover lost ground, we can collect its newly announced dividend of 40 cents a share — payable Jan. 2 to shareholders of record, as of Dec. 14.
Amplify Lithium & Battery Technology ETF (BATT)
Or, if you want to diversify at a lower cost, there’s always an ETF like the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT). With an expense ratio of 0.59%, the BATT ETF invests in companies involved with battery storage, battery metals, materials and electric vehicles (EVs). It’s just as oversold as ALB at the moment. But don’t write it off. With EV demand picking up speed, so is the demand for battery components.
Some of the top BATT holdings include Tesla, BYD (OTCMKTS:BYDDF), Glencore (OTCMKTS:GLNCY), Panasonic Holdings (OTCMKTS:PCRFY), BHP Group (NYSE:BHP), Albemarle and Ganfeng Lithium (OTCMKTS:GNENF) — to name a few. From its current price of $10.33, I’d like to see it initially retest $11.25. Longer term, I’d like to see it again test $14.
On the date of publication, Ian Cooper did not hold (directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
