With sentiments still bearish for EV stocks, it’s a good time to accumulate some of the best battery stocks with high growth potential. Looking beyond near-term headwinds, the growth story for EVs is still at an early stage.
To put things into perspective, the battery value chain will likely see 14-fold growth in demand by 2030. It’s expected that annual battery production revenue will be $300 billion by the end of the decade. If these numbers hold true, there is immense headroom for growth for some of the best battery stocks.
Besides the impending growth, innovation in the industry is likely to be a key factor. Some key focus areas include solid-state batteries, reduction in battery cost, and boosting battery density. Investors should therefore focus on companies investing in research and development.
Let’s discuss three 100% return battery stocks considering the fundamentals and growth plans.
Panasonic Holdings (PCRFY)
Panasonic Holdings (OTCMKTS:PCRFY) stock has gained momentum with an upside of 23% for year-to-date 2023. I remain bullish on this undervalued battery stock that trades at a forward price-earnings ratio of 9.2. A dividend yield of 2.1% is also attractive.
One reason to be bullish on Panasonic is its aggressive growth strategy. The company is contemplating a third battery plant in the United States. One plant is operational, and the construction of the second plan has commenced. Elsewhere, Panasonic is considering a joint venture manufacturing site in Japan with Toyota (NYSE:TM) in Japan.
With these investments, revenue growth is likely to remain steady. Further, as cash flows swell, Panasonic will be positioned to increase dividends. Panasonic is also eyeing a 20% increase in battery density by 2030. The company also has 445 patents in the solid-state battery space. Investment in innovation will help the company maintain and potentially boost market share.
Solid Power (SLDP)
For Solid Power (NASDAQ:SLDP), there are many ifs and buts on the road to potential value creation. However, the stock is massively undervalued. Given some of the recent business developments, SLDP stock deserves a higher valuation. It’s among the list of battery stocks to double by 2025.
Two important points from the business perspective are likely to help SLDP stock double from current levels. First, Solid Power will deliver EV cells to automotive partners for validation testing in 2023. This is the first step towards possible commercialization in the coming years. The company’s strong automotive partners include Ford (NYSE:F) and BMW (OTCMKTS:BMWYY).
Further, Solid Power signed an agreement in December 2022 to license its cell design and manufacturing process to BMW. This will help in parallel research and development activities and speed up the path toward the commercialization of solid-state batteries.
Lithium Americas (LAC)
It’s estimated that by 2035, the global lithium supply gap will be 24% of the total demand. Lithium prices are therefore positioned to trend higher in the coming decade. This makes lithium mining stocks attractive. Lithium Americas (NYSE:LAC) stock is among the best mining stocks to buy, with 100% returns potential by 2025.
The company’s lithium asset in Thacker Pass is likely to be a game changer. The asset has an after-tax net present value of $5.7 billion, and the project has an attractive IRR of 21.4%. Once operational, the asset will deliver healthy cash flows. Earlier this year, General Motors (NYSE:GM) infused $650 million to develop the asset. The financing will ensure smooth development and first production in 2026.
Additionally, Lithium Americas has a stake in the Cauchari-Olaroz asset in Argentina. The company has already finalized the separation of U.S. and Argentina assets for listing as separate entities. The Argentina asset is targeting its first production in 2023. This is a potential catalyst for stock upside.
On the date of publication, Faisal Humayun 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.