The three battery stocks investors should be looking at this month for great returns
As the world accelerates its transition to sustainable energy, the spotlight has never been brighter on the battery industry. Batteries, crucial for storing and managing the energy produced by renewable sources, are the backbone of the green revolution. In turn, many investors are turning to battery stocks to buy.
By 2030, Li-ion battery demand is expected to increase from 700 GWh in 2022 to 4.7 TWh. This is driven primarily by the rising demand for electric vehicles. China is projected to lead in Li-ion demand. This accounts for 45% of the total demand by 2025 and 40% by 2030. Investors expect the revenues of the market to grow from $85 billion in 2022 to over $400 billion by 2030.
Additionally, recent policy developments have further bolstered the industry’s prospects. The United State government, as part of its sustainable energy initiatives, has pledged subtantial funding. This funding will foster innovation and scale production capabilities in the battery sector.
Hence, this is an opportune time to invest in battery stocks and benefit from the growth of the market. Here are the top X battery stocks to consider adding to your portfolio in May 2024.
BYD (BYDDF)
BYD (OTCMKTS:BYDDF) has rapidly ascended to a position of prominence in the global electric vehicle market. The company has distinguished itself in the electric vehicle industry through its comprehensive vehicle offerings and its advances in battery technology.
One of BYD’s most significant innovations in battery technology is the development of the Blade Battery. Introduced in 2020, its creators designed the Blade Battery to be a safer and more durable alternative to traditional lithium-ion batteries used in most electric vehicles.
In 2023, BYD achieved a significant milestone by surpassing Tesla to become the world’s largest EV manufacturer by sales volume. Selling over 526,000 BEVs in the fourth quarter alone supported this achievement.
The company is helped by government subsidies and tax breaks, which have enabled it to control costs and reduce production timelines to 18 months, significantly faster than many Western competitors. Do yourself a favor and add this and the rest of these battery stocks to buy to your porfolio.
Albemarle (ALB)
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Albemarle (NYSE:ALB) is major player in the global battery sector. The company is involved in the production of lithium compounds used in batteries for electric vehicles.
Albemarle is currently faced with challenging market conditions leading to a 11% year-to-date (YTD) decline in the company’s stock price. The company, along with other industry players, had ramped up lithium supply in anticipation of a boom in EV demand that has not materialized at the expected pace, particularly in North America.
Albemarle reported a significant decline in revenue for Q1 2024 compared to the previous year. The company achieved net sales of $1.4 billion, a 47% decrease year-over-year (YoY), primarily due to lower pricing.
However, Albemarle’s management has maintained a bullish long-term outlook on lithium demand, driven by the ongoing transition to electric mobility and increased requirements for energy storage solutions.
During the Q1 2024 earnings call, CEO Kent Masters reiterated the expectation of lithium demand growing by 2.5 times from 2024 to 2030. This projection is supported by anticipated advancements in battery technology and increased EV adoption globally. This is one of the top battery stocks to buy on the market.
Lithium Americas (LAC)
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Lithium Americas (NYSE:LAC) recently raised $275 million through a public offering of 55 million shares at $5 each. This strategic move, while dilutive in the short term, positions the company to bolster its working capital and sustain its expansive project developments.
The company’s Thacker Pass project underscores its potential to become a key player in the global energy transition. The company set the project to produce enough lithium to meet the battery demand for about 800,000 EVs annually once it reaches full production.
Lithium Americas is forming strategic partnerships to ensure demand for its output. The company will jointly develop the Thacker Pass lithium mine with General Motors which has invested $650 million in LAC. The lithium from Thacker Pass will support GM’s Ultium battery cells, enabling the production of up to 1 million EVs annually.
Lithium Americas’ strategic partnerships, significant government backing, and a strong position in a vital raw material market make it a compelling investment option for investors. If you are looking for battery stocks to buy, start here.
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.
