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Key legislative tailwinds and innovations in solid-state technology fuel investor enthusiasm
Valued at $127.3 billion in 2023, the global battery market is predicted to reach $276.3 billion by 2032, expanding 8.7% yearly and attracting great interest in battery stocks.
Sales of lithium-ion batteries are expected to rise 23.33% from $64.84 billion in 2023 to $446.85 billion in 2032.
The U.S. market is vital due to demand for electric vehicles, energy storage and consumer electronics. Investment in clean energy infrastructure is rising locally. In addition to the local U.S. demand for electric vehicles, good legislative tailwinds enable the industry’s expansion. For instance, the bipartisan Infrastructure Law funds $7.5 billion to create a nationwide system of electric vehicle chargers.
Notwithstanding the huge U.S. market, notable industry events pique interest in battery stocks.
Quantumscape (NYSE:QS) and Volkswagen‘s(OTCMKTS:VWAGY) PowerCo secured a historic arrangement to produce many solid-state batteries. Hyundai (OTCMKTS:HYMTF) and LG Energy Solution established Indonesia’s first EV battery factory. In addition, Ferrari (NYSE:RACE) debuted a $7,500 subscription service for batteries for hybrid and electric cars.
Amid all of these happenings, let’s look at three consensus “Buy” battery stocks with double-digit upsides. These companies are developing innovative products.
Enovix (ENVX)
Enovix (NASDAQ:ENVX) is partnering with Group14 Technologies’ SCC55 silicon-carbon composite to develop cutting-edge silicon batteries. This partnership aims to boost lithium-ion silicon battery capacity by 50% over current systems.
Moreover, Enovix is scheduled to establish a new Malaysian plant, which will greatly increase production capacity to satisfy the rising demand for its innovative battery technology. Enovix has also extended its operating runway till 2026 and implemented a consolidation plan to save fixed expenses by approximately $35 million yearly.
Enovix has inked a deal to provide high-performance batteries for mixed-reality headsets, indicating its foray into new consumer electronics markets.
To further tap the consumer electronics sector, Enovix inked an agreement with Elentec, a top producer of consumer electronics batteries that serves customers such as Samsung Electronics (OTCMKTS:SSNLF).
Thanks to its collaboration with Elentec, Canaccord Genuity notes Enovix’s enhanced regional reach and client base. The cooperation, especially in the consumer electronics sector, will likely consolidate Enovix’s position in Asia.
Canaccord Genuity kept its Buy rating on Enovix and set a $17 price target. Still, the consensus price target for the stock is $30.88, translating into a potential upside of around 68%, which is not bad when considering “Strong Buy” battery stocks.
Li Auto (LI)
Source: Robert Way / Shutterstock.com
Li Auto (NASDAQ:LI) has teamed up with CATL to utilize their recently introduced long-range EV battery, which has a 15-year guarantee and a lifetime of up to 1 million miles. This cooperation seeks to improve Li Auto’s electric car range and dependability.
CATL declared intentions to build a new battery facility in Beijing to supply batteries to Li Auto and Xiaomi (OTCMKTS:XIACY). This factory will help Li Auto embrace cutting-edge battery technology and meet its growing manufacturing requirements.
In addition, Li Auto is working with NVIDIA to integrate DRIVE Thor centralized vehicle computers into its next electric car fleets. This technology is supposed to enhance autonomous driving powers and vehicle performance.
Li Auto is also in talks to partner with Renault (OTCMKTS:RNLSY) and Xiaomi on electric and intelligent vehicle technologies. These conversations might lead to cooperation and advances in EV batteries.
Meanwhile, Li Auto said it delivered 47,774 automobiles in June 2024, a 46.7% annual increase over the previous year. With more than 15,000 units sold since its April introduction, the company’s five-seat luxury family SUV, Li L6, has quickly become quite popular.
Li Auto will launch new all-electric SUVs in the first part of 2025, further improving its market share. Analysts project a 35% upside for NIO.
Solid Power (SLDP)
Source: T. Schneider / Shutterstock.com
Solid Power‘s (NASDAQ:SLDP) first-quarter 2024 statistics indicate it’s still meeting its targets. The SLDP underlined the significance of progressing on projects like those with SK.
Solid Power and SK On have struck many arrangements to deepen their partnership. Examples include a research and development contract for Solid Power’s solid-state cell designs, a manufacturing line at SK On’s Korean facility and an electrolyte supply arrangement. Over the next three years, these transactions should generate $50 million.
Additionally, Ford (NYSE:F) partners with Solid Power on a mission to expedite solid-state battery development. As part of this collaboration, Ford is receiving full-size 100 Ah cells from Solid Power for testing and car installation.
Solid Power has also provided Bayerische (OTCMKTS:BMWYY) with its first solid-state batteries for testing electric cars. The deal’s research and development license allows BMW to establish an all-solid-state battery test line at its Munich Cell Manufacturing Competence Center.
Solid Power is developing sulfide-based solid electrolytes for safer, more energy-dense, cheaper batteries. Company batteries use high-content silicon anodes, sulfide solid electrolytes and NMC cathodes for better performance than lithium-ion batteries.
Solid Power is also developing new battery designs to prevent lithium dendrite growth from short-circuiting and draining high-demand electric car batteries. The company plans to introduce these advanced solid-state batteries by 2026. The average target price is $3, a potential 37% upside.
On the date of publication, Faizan 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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