Battery stocks have seen a sell-off as lithium prices have fallen significantly from their 2022 highs, coupled with sluggish demand in the electric vehicle market.
However, consider that the long-term trend towards electrification is unlikely to go away anytime soon, plus the fact that the lithium market is showing signs of recovery, with prices rising by double digits. Some experts believe it’s time to invest some of the best battery stocks, like the three below.
Lithium Americas (NYSE:LAC) should be one of the most promising stocks in the lithium space to generate multibagger returns. This top lithium stock is down about 30% year-to-date due to headwinds in the lithium market. However, that hasn’t stopped it from moving forward with lithium production, and the company’s Thacker Pass project in northern Nevada is already producing at full capacity. Construction on the project began early last year and is likely to accelerate in the second half of 2024. The company aims to reach full production within the next four years, recovering up to $3.9 billion worth of lithium.
Thacker Pass project has an after-tax net present value of $5.7 billion. In addition, the company has secured sufficient funding for the first phase of its project after receiving a $2.26 billion financing commitment from the U.S. Department of Energy. Coupled with a massive $650 million investment from General Motors (NYSE:GM), Lithium Americas is now in an excellent strategic position to move forward with lithium production.
Shares of auto giant Toyota’s (NYSE:TM) stock has risen nearly 27%, outperforming the S&P 500’s 7.5% return. Toyota has been cautious about its electric vehicle business, so the weakness in the EV market has had a limited impact on its stock. The automaker’s long-term pragmatic strategy in electrification is paying off as the business grows rapidly.
In addition, Toyota has been investing heavily in solid-state batteries, with investments up to $13.6 billion. According to Toyota, these batteries will be released in 2027 and feature 10-minute fast charging and a range of up to 750 miles. In other words, by the end of the 2020s, these features will disrupt the EV game, greatly increasing the range and efficiency of cars while reducing costs by 50 per cent. Additionally, the company aims to integrate these batteries into hybrid vehicles to address teething problems and ensure greater diversity in its vehicle lineup.
Solid Power (NASDAQ:SLDP) is probably the best bet when it comes to solid-state batteries. Whereas many companies have tried to commercialize solid-state batteries before this and failed, the company seems to have found the secret to success. Solid-state or permanent batteries could be hugely disruptive, especially in the electric vehicle sector. These batteries are unique in terms of charging speed, safety and energy density, and have the potential to revitalize the currently depressed EV market and take EVs to new heights.
Solid Power has made impressive progress over the past few years, providing its automotive partners with A sample battery for testing. In addition, the company aims to develop an even better performing A-2 sample battery that will enable even greater safety and performance. With support from giants like BMW and Ford (NYSE:F), Solid Power is expected to continue to soar. Investors are also confident about the future of this stock, pushing its shares up 30% in the past six months.
