As the world shifts to electric vehicles, demand for EV batteries will skyrocket. All of which should be great news for these top EV battery stocks moving forward. Unfortunately, there’s just one problem. There’s not enough battery supplies.
As noted by Business Insider, “Ford (NYSE:F), GM (NYSE:GM), and Porsche (OTCMKTS:DRPRY) pointed to delays, constraints, and expenses related to EVs and their batteries in recent financial results. These issues are not only causing them to fall short of their ambitious electrification targets but also impacting their balance sheets.”
Worse, Stellantis (NYSE:STLA) CEO Carlos Tavares warned he expects shortages of batteries and raw materials in coming years. 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.
With EV demand unlikely to slow, the world needs to get its hands on far more batteries. And also, to the raw materials that go into them. Until supply can meet demand, investors may want to consider these three EV battery stocks.
Battery Stocks: Lithium Americas (LAC)
Source: Wirestock Creators / Shutterstock.com
With the world going green, we need as much lithium as possible. Unfortunately, there’s far more demand than there is supply here, too. Even lithium producers have warned of a global supply shortage. It’s gotten so bad that automakers like General Motors invested $650 million in Lithium Americas (NYSE:LAC) Thacker Pass Mine to secure supply.
Even better, the U.S. Department of Energy is reportedly in talks to lend Lithium Americas about $1 billion, which would help fund Thacker Pass, too. The opportunity is so massive, “the outlay would be the largest-ever loan awarded to a mining company through the Energy Department’s Loan Programs Office,” as noted by Seeking Alpha.
We should also note LAC may be sitting on one of the world’s biggest lithium deposits. It’s believed that the deposit – which sits on the Nevada-Oregon border – could hold 20 million metric tons of the metal.
Panasonic Holdings (PCRFY)
Or, take a look at Panasonic Holdings (OTCMKTS:PCRFY). Since May, the battery stock jumped from about $9.25 to a high of about $12.75. Now at $11.32, we’re being offered another opportunity to buy PCRFY on the cheap.
Further, Panasonic is one of the top suppliers of lithium-ion batteries to companies like Tesla (NASDAQ:TSLA). Better, moving forward, the company wants to build out an additional four EV battery plants by 2031.
Earnings growth should continue to get stronger, too – especially with accelerating demand for EVs. In its most recent quarter, it posted a “net income surge of 310% to 200.93 billion JPY and a remarkable 9.9% net profit margin. The upswing indicates that Panasonic is not just treading water, it is cruising in the fast lane,” as noted by Investorplace contributor Faizan Farooque.
Solid Power (SLDP)
Source: T. Schneider / Shutterstock.com
We can also look at excessively oversold shares of solid-state battery firm, Solid Power (NASDAQ:SLDP). After plunging from about $2.90 to $1.90, the stock appears to have caught strong triple-bottom support dating back to January. It’s also over-extended on RSI, MACD, and Williams’ %R. From its current price of $2.02, I’d like to see SLDP again challenge $3 near term.
We also have to consider that solid-state batteries may hold a good deal of promise. In fact, as noted by The Denver Post, “Solid-state battery technology holds great promise due to its potential to offer higher energy density, improved safety, faster charging times, and longer lifespan compared to traditional lithium-ion batteries,” said Jon Morgan, CEO of Venture Smarter, a consulting firm.
Plus, SLDP earnings growth hasn’t been too shabby. In its second quarter, the company posted revenue of $4.9 million, up from $2.3 million in the second quarter of 2022. First half 2023 revenue was $8.7 million, up $3.9 million from the first half of 2022.
Granted, operating expenses were higher in the second quarter and first half of 2023. However, that was expected with company investments in product development and operations. All of which resulted in a second quarter 2023 operating loss of $22.2 million and a net loss of $12.2 million, or seven cents per share.
On the date of publication, Ian Cooper did not hold (either 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.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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