Electric vehicles have cemented their place in the automotive industry. But EV battery innovation is a massive opportunity for investors. That’s because users continue to have range anxiety, and other key concerns, with buying a new EV. In addition, safety concerns and charging times remain issues as well. As a result, the entire industry is scrambling to find better EV batteries than those currently offered in today’s EVs.
Unsurprisingly, there’s an arms race in battery innovation currently underway. The winners are becoming more clear, as time passes. Investors are keenly analyzing the sector to identify the best battery innovations to invest in now. Any technology that offers potential increases in range, a more reliable safety profile, or lower cost is surely a potential game changer. Here are three key trends I think are important for EV investors to watch.
Most EV investors are well-aware of the opportunity in solid-state battery technology. Unfortunately, current EV batteries rely on liquid electrolyte chemistry, which is inferior to solid-state batteries. In addition, lithium-ion batteries are nearing their limits regarding energy density. That means the range anxiety so often-discussed today is unlikely to be solved as long as lithium-ion batteries dominate the market.
Further, Lithium-ion batteries take a long time to charge. Even the fastest batteries require 30 minutes to achieve a full charge. If that weren’t enough, they’re dangerous due to their flammability.
Solid-state batteries solve those problems. They provide greater range, faster charging, and are much safer. That’s why investors continue to direct their capital to leading firms in this space. Specifically, companies like QuantumScape (NYSE:QS) and Solid Power (NASDAQ:SLDP) are among the leaders pioneering this technology.
While these solid-state batteries aren’t expected to be commercially-available for five years or more, aggressive growth investors might want to buy in now.
Chemistry Advancements in Current Battery Tech
Investing in chemistry advancements in current battery tech is another niche area of innovation to consider. That’s because commercially-viable solid-state batteries could take five or more years to truly proliferate.
In the meantime, any technology that promises to improve current lithium-ion battery technology has a window of invincibility worth exploring.
Let’s look at a few of the possibilities. One idea is cobalt-free batteries, in which a cobalt cathode is not used. Instead, a mix of nickel, aluminum, and manganese is considered an alternative. Researchers at the University of Texas claim ion distribution is improved in this scenario. And Chinese firm SVOLT manufactures cobalt-free batteries, which it claims to have a range of 500 miles per charge.
Another technology replaces the graphite anode with higher-capacity silicon. Silicon has greater capacity than graphite, although it remains unclear what effect this would have on key metrics such as range and charging times.
One issue in investing in these alternative chemistries is, again, the long lead times these technologies may take to become commercially viable. Thus, this is a more speculative space to consider, though one I think is worth keeping on the radar.
Charges lasting 500 to 1,000 miles
It’s no secret that charging capacity is a key concern among many prospective EV buyers. That said, electric vehicles that can last 500 to 1,000 miles on a single charge would undoubtedly be a game changer in the EV battery space. It looks like the recent average range is 211 miles. So, to extend the range by a factor of 2.5- to 5-times would be a quantum leap forward.
This is a core pursuit of those innovating in the battery sector, rather than an innovation in and of itself. For example, a company named Grapheno claims to be developing a battery that will offer 500 miles of range and a charging time of a few minutes. Another technology relies on the aluminum-air tech that pulls oxygen in the air into its cathode. Overall, the result is a much lighter battery that traveled 1,100 miles on a single charge in an experimental vehicle.
For now, solid-state batteries seem like the most promising innovation area. They seem to have the most potential commercial viability overall. Time remains the issue concerning the investment-worthiness of such stocks. But all these key battery innovations are worth watching, for those with skin in the game.
On the date of publication, Alex Sirois did not have (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.