As the global push towards renewable energy gains momentum, the battery industry finds itself in a transformative wave. Investments in battery technology are booming, fueled by governmental incentives and a societal shift towards greener alternatives.
As per Precedence Research, the global electric vehicle battery market is experiencing significant growth. It remains projected to expand from $63.51 billion in 2023 to approximately $573.08 billion by 2033. This has positioned the battery sector as an attractive sector for forward-thinking investors.
Considering these dynamics, July 2024 offers a strategic entry point for investors looking to capitalize on the burgeoning battery market. As such, identifying key players in the battery sector who are innovating could offer significant returns. Hence, here are the three best battery stocks that are well-positioned to benefit from the industry’s explosive growth.
NIO (NIO)
NIO (NYSE:NIO) is a leading Chinese electric vehicle manufacturer. The company has set itself apart in the EV market through its proprietary battery-swapping technology. As of 2024, NIO has already installed an extensive network of battery swap stations across China. The resulting infrastructure enhances user convenience and addresses range anxiety among EV users.
NIO has demonstrated remarkable resilience in its delivery metrics, a vital sign of its operational health. In May 2024, the company reported shipping a robust 20,544 vehicles. This marks a significant rebound from less than 10,000 deliveries in February 2024. This upswing in deliveries is particularly noteworthy, considering the broader market pressures. It is also indicative of the company’s robust demand and recovery capabilities.
In the Q1 2024 earnings call for NIO Inc., the company reported a decrease in earnings per share and revenue compared to the previous year. The EPS was -$0.35, missing forecasts by $0.08, and revenue fell by 8.69% year-over-year (YOY) to $1.37 billion.
Despite these challenges, NIO is optimistic about its growth prospects, especially with the introduction of new models and the expansion of its service network. NIO’s vehicle margin increased to 9.2% in Q1 2024, up from 5.1% a year earlier, suggesting efficiency gains and better cost management.
BYD (BYDDY)
BYD (OTCMKTS:BYDDY) is a leading force in the electric vehicle industry. The company’s aggressive expansion strategy and innovative approach to technology have positioned it uniquely in the rapidly evolving EV market.
At the heart of BYD’s success in the EV market is its proprietary Lithium Iron Phosphate battery technology, known for its safety, longevity, and cost-effectiveness. This technology distinguishes BYD from its competitors by offering a lower risk of thermal runaway and a longer life cycle than conventional lithium-ion batteries used by other manufacturers.
Moreover, BYD has consistently demonstrated strong momentum in its core markets, particularly in China, where it maintains a significant lead over competitors. The company’s strategic focus on international markets is evident as it seeks to establish itself as a dominant global EV brand.
In 2023, BYD achieved a milestone by surpassing Tesla in quarterly EV sales, making it the world’s largest EV manufacturer by volume—a testament to its robust production capabilities and widespread market acceptance as one of the best battery stocks.
Albemarle (ALB)
Albemarle (NYSE:ALB) is an intriguing prospect for investors looking at long-term growth aligned with global energy transition trends. The company holds a commanding position as one of the largest lithium producers globally, which is essential for batteries in EVs and energy storage solutions.
Albemarle’s battery operations are anchored by its robust lithium extraction and processing capabilities. Recognizing the critical role lithium plays in battery technology, the company has aggressively expanded its production capacity. In 2023 alone, Albemarle achieved a 35% increase in lithium volume. This underscores its commitment to meeting the global demand driven by the EV boom.
The company’s strategy to scale operations and enhance production efficiency has buffered the financial impact of declining lithium prices. This comes despite them not returning to the highs seen in 2021-2022 while remaining elevated compared to pre-pandemic levels.
ALB’s full-year 2023 revenue climbed 31% to $9.6 billion, underscoring the strong demand underpinning its business model among the best battery stocks.
On the date of publication, Mohammed Saqib did not hold (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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.