There is no doubt that the electric vehicle industry while growing at a rapid pace still facing some major challenges, including consumer anxiety about range, long battery charging times, and the supply of charging infrastructure. According to PWC’s latest forecast, the electric vehicle Supply equipment (EVSE) market will grow at a compound annual growth rate of 15% from $7 billion to $100 billion by 2040.
As a core component of electric vehicles, the battery draws the most attention in this huge market. It is no exaggeration to say that the future of electric vehicle demand will largely depend on the progress of battery technology. Here are three EV battery stocks which Wall Street analysts think with over 100% upside potential, therefore buying opportunities can be considered.
Sigma Lithium Corporation is a major player in the lithium industry, focusing on the development of lithium resources in Brazil, and currently has several properties covering approximately 185 square kilometers in the state of Minas Gerais. In the second quarter of this year, the company consolidated its market position by increasing volume and achieving prices that were 10% higher than those of its competitors. Despite the challenging lithium market conditions, the company achieved significant operational and financial success in the second quarter, increasing production to 22,000 tonnes every 30 to 35 days, demonstrating its reliability as a supplier.
Management discussed strategic plans in a recent earnings call to expand capacity to 100,000 tonnes of lithium carbonate equivalent (LCE) by 2026, with plans to produce about 80,000 tonnes of LCE, or 520,000 tonnes of lithium concentrate, by next year. It will then embark on the construction of a third production line with a capacity of 250,000 tons of LCE.
At the end of the second quarter, Sigma Lithium shares were held by 20 hedge funds with a stake worth $89.137 million. The largest shareholder, Appian Way Asset Management, owns 2.6 million shares of the company worth $31.3 million. Four of the Wall Street analysts who cover the stock maintain a “buy” rating on the stock, with a median price target of $22.03 implying 115.55 percent upside from the Sept. 12 closing price.
Solid Power, Inc. is a Colorado-based company focused on solid-state battery technology, particularly in electric vehicles and other areas. The company is known for its sulfide-based solid electrolytes and has a proprietary battery design and production method. Solid-state battery technology improves safety and energy density by 50-75% compared to conventional batteries, making it a competitive choice in electric vehicles, electronics and aerospace.
Solid Power has been working with major automakers in recent years to produce solid-state batteries and sulfide solid electrolytes. The company has set up pilot production lines to improve battery design, and has partnered with companies such as SK, Ford and BMW. Management currently focuses on expanding electrolyte production, improving battery design and strengthening industry partnerships, with recent announcements include increased shipments of electrolytes and improvements to the A-2 battery design.
Wall Street analysts have mixed views on Solid Power’s stock, but five analysts have an average price target of $3.00, which represents 130.77% upside from the stock’s closing on Sept. 12.
Piedmont Lithium Inc. is almost a household name in the lithium battery market, with two additional projects, Bessemer City and Kings Mountain, in addition to the Carolina Lithium project in North Carolina. To capitalize on the growing demand for electric vehicles, the company is focusing on the production of lithium hydroxide, a compound that is essential for the lithium-ion batteries that power electric vehicles.
The company is also advancing lithium projects in Quebec with the goal of producing approximately 60,000 tons of lithium hydroxide per year through these operations, making a significant contribution to the domestic lithium supply in the United States.
In 2022, Piedmont Lithium signed a major supply contract with Tesla, agreeing to supply spodumene concentrate through 2025. The agreement is adjusted in 2023 and under the updated terms, the company will deliver 125,000 tonnes of spodumene concentrate from Sayona Mining’s North American lithium project in Quebec, Canada.
In April 2023, LG Chem provided the company with a $75 million equity investment and committed to purchase 200,000 tons of spodumene concentrate over four years. Right now, the 10 Wall Street analysts who cover the stock unanimously have a buy rating on Piedmont Lithium, with an average price target of $20 representing 175.86% upside from the Sept. 12 close. In addition, at the end of the second quarter, a total of nine hedge funds owned Piedmont Lithium shares with a total value of $9.559 million.
If you are interested in EV battery stocks, please pay close attention to First Phosphate (CSE: PHOS) (FSE: KD0). This is the only publicly listed company that is fully dedicated to extracting and purifying phosphate for the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry. LFP batteries operate similarly to other lithium-ion batteries. They have the advantage of being non-toxic, having superior fire safety, longer cycle life and lower cost. The company is the Building Block for a North American LFP Battery Ecosystem, the company holds a total of 1,500+ sq. km of royalty-free land claims in the Saguenay-Lac-St-Jean Region of Quebec, Canada consisting of rare anorthosite igneous phosphate rock that generally yields high purity phosphate material devoid high concentrations of harmful elements.
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