The electric-vehicle industry won’t get far without the batteries that power EVs. While some of the larger electric-vehicle manufacturers are developing their own batteries, most companies are relying on outside battery makers that are working to refine and perfect the power sources for EVs. And the battery market is set to explode in coming years. According to Fortune Business Insights, the worldwide EV battery market is forecast to swell from $21.95 billion in 2020 to $154.90 billion in 2028. As a result, investors should consider buying the shares of beaten-down EV battery makers. Here are three dead battery stocks to buy now before they recharge.
Right now, Tesla (NASDAQ:TSLA) stock is just roughly 8% above its 52-week low of 204.16. In the last month, its share price has fallen 30%. On Nov. 4 last year, TSLA stock closed at a then –record high of $409.97.
Tesla operates giant factories where it builds batteries for its own EVs. The company calls these factories Gigafactories.
Tesla’s share price hasn’t been this low in nearly two years. Investors who’ve been wanting to take a position in the world’s largest electric-vehicle maker should load up now before the stock recharges.
The reasons for the accelerated slowdown in recent weeks include a myriad of problems such as poor third-quarter delivery numbers, increased prices for its electric vehicles that analysts warn could hurt consumer demand, ongoing disruptions at its factory in Shanghai, China due to Covid-19 lockdowns, global supply shortages, and rising raw material costs. Tesla CEO Elon Musk’s public battle with Twitter (NYSE:TWTR) and comments he made recently about the war in Ukraine haven’t helped Tesla either.
However, TSLA stock looks grossly undervalued at its current levels, and analysts remain bullish on the company’s long-term outlook. The current median price target on Tesla’s shares is $320.83, implying a potential increase of about 50% over the next 12 months.
Speaking of battery stocks that have slumped to 52-week lows, check out Quantumscape (NYSE:QS). The company is engaged in the development of solid-state lithium metal batteries that hold the promise of faster charging times and longer lifespans. While many analysts see solid-state batteries as the future of the electric-vehicle industry, investors seem to be taking a wait-and-see approach, judging by the performance of QS stock.
In 2022, QS stock is down 63% and trading not far above its 52-week low of $7.65 per share. In December 2020, Quantumscape’s share price peaked at an all-time high of $114.77.
The main issues holding back Quantumscape appear to be the fact that the company remains in start-up mode, is continuing to refine its technology, and is not yet profitable. However, many notable investors remain high on Quantumscape and its stock, including Microsoft (NASDAQ:MSFT) co-founder Bill Gates and German auto giant Volkswagen (ETR:VOW3).
The median price target on QS stock among nine analysts who cover the company is $12.
Lithium Americas (LAC)
Looking to Canada, there is Lithium Americas (NYSE:LAC) stock. Based in Vancouver, Lithium Americas mines the lithium that is the essential ingredient in electric vehicle batteries. And while the company is headquartered in Canada, its main mining operations are located in South Dakota and North Carolina. In business for more than 35 years, Lithium Americas is an established and mature producer of the key material that is required in all EV batteries.
Owing largely to lithium’s essential nature for EVs, LAC stock has outperformed most of its peers this year, having only fallen 20% to $23.40 a share. In the last year, the stock has declined 8.5%, which is much better than Tesla, Quantumscape and many other electric vehicle and battery stocks. Looking further out, LAC stock has performed even better, up nearly 180% over the last five years.
The ten analysts who publish estimates on LAC stock have a median price target on the shares of $36.90.
On the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.