It’s tough to advocate for buying battery stocks at this point. With the slowdown in demand for EVs, we’ve seen battery stocks sell-off over the past year or so. Consequently, prices of critical components such as lithium have declined sharply from their peak in 2022.
Nevertheless, with secular tailwinds powering at their back, the long-term bull case for battery stocks remains firmly in place. The EV sector is in recalibration mode, but the long-term electrification trend is unlikely to disappear anytime soon. Moreover, we’ve seen a resurgence in the lithium market, where shiny metal prices are up by double-digit margins this year. A few experts believe that prices have bottomed out, and it may be time to load up on the best battery stocks to buy.
Battery Stocks to Buy: Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) is arguably one of the best opportunities for multibagger gains in the lithium mining space. With the headwinds in the lithium market, LAC stock has fallen out of favor with investors, losing roughly 30% year-to-date (YTD). However, its stock performance has done little to deter its spirit, with LAC pushing along at a remarkable pace, reaching full production at the Thacker Pass Project in Northern Nevada. Construction began early last year, and things are likely to speed up in the second half of 2024. Moreover, the goal is to reach full capacity within the next four years, recovering a whopping $3.9 billion worth of lithium.
The Thacker Pass project is a gold mine, to say the least, with an after-tax net present value of $5.7 billion. Moreover, following a $2.26 billion financing commitment from the U.S. Department of Energy, it has secured enough funding for the first phase of its project. Moreover, adding to that is General Motors’ (NYSE:GM) massive $650 million investment, and you have LAC in an excellent strategic position to advance its efforts.
Solid Power (SLDP)
Solid Power (NASDAQ:SLDP) is perhaps the best bet on solid-state batteries. Many have tried and failed to commercialize solid-state batteries, yet SLDP appears to have found the successful formula.
Solid-state or forever batteries can be incredibly disruptive, especially in the EV space. These batteries are a class apart regarding charging speeds, safety, and energy density. Moreover, they have the potential to rejuvenate the current sluggishness in the EV market, taking things to the next level.
SLDP has made some impressive strides over the past several years, delivering A-sample cells for its automotive partners to test out. Moreover, the goal is to develop superior A-2 sample cells, potentially delivering superior safety and performance. Also, with the backing of automotive titans in BMW (OTCMKTS:BMWYY) and Ford (NYSE:F), it has the impetus to continue marching forward with aplomb. Encouragingly, SLDP stock has been trading in the green in the past six months, gaining 30% in the past six months.
Toyota (TM)
Automotive giant Toyota (NYSE:TM) has been bucking broader market trends lately. Its stock is up almost 27%, trumping the S&P 500’s return of 7.5%. Toyota’s cautionary approach to EVs has paid off for its business, which has grown rapidly. The automaker has employed a pragmatic approach to electrification, playing the long game in expanding its position in the EV sector.
Furthermore, it’s been investing heavily in solid-state batteries, with a whopping $13.6 billion investment to advance its efforts. According to Toyota, these batteries are targeted for a 2027 release, boasting features such as 10-minute fast charging and ranges up to 750 miles. These features could prove game-changing, significantly enhancing vehicle range and efficiency while cutting costs by 50% by the late 2020s. Moreover, the goal is to integrate them into hybrids to manage teething issues, ensuring a more diversified approach to its vehicle lineup.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
