I’m not sure these three battery stocks are the only ones to consider this month, but I do believe they are strong choices for investors. The growth of the electric vehicle (EV) industry has galvanized capital inflows into the space as EV sales have reached a critical mass. That truth is polarizing, but it means battery stocks are going to continue seeing high interest for the foreseeable future.
In fact, there are many ways to look at battery investments: raw materials, manufacturers of current generation batteries, future generation battery manufacturers and more. What follows is a relatively diverse variety of those firms.
Solid Power (SLDP)
Solid Power (NASDAQ:SLDP) is a firm for the risk-tolerant investor seeking explosive future growth on breakthrough technology commercialization. The breakthrough technology I’m referring to is solid-state battery cell technology. Solid Power is one of several firms developing such cells that promise to revolutionize the EV battery space.
Solid-state battery cell technology will displace current-generation lithium-ion battery technology at some point. It provides greater range and safety and has the potential to solve the range issue that remains a hurdle for greater EV adoption.
The company is well on its way in that regard. It is scaling both electrolyte production and EV cell production currently. Electrolyte sampling has gone well, and the company received positive feedback from its industry partners. In fact, it is on track to deliver sample EV cells to partners this year.
Revenues roughly doubled in Q2 on a year-over-year basis, reaching $4.9 million, while operational losses increased by more than 50%. That is a positive thing, suggesting Solid Power has the potential to continue growing while keeping expenses from rising.
FREYR Battery (FREY)
FREYR Battery (NYSE:FREY) is aiming to produce environmentally friendly batteries at gigafactories in Europe and the United States. The stock is catching investor attention for that plan as more and more investors question the environmental effects of EV production. Another reason to consider FREY is the execution of its plan and the strategy it is enacting.
That strategy is predicated on maximizing public funding available as an EV battery producer. The European Union recently awarded the company a 100 million EUR grant to promote localized EV battery production. The funds will allow Freyr Battery to develop its Giga Arctic plant in Norway.
At the same time, FREY is planning to redomicile its corporate holding company from Luxembourg to the United States — Georgia. That effort aims to maximize subsidies available to the firm under the Inflation Reduction Act. All in all, Freyr Battery stands as strong a chance of success as its competition because it is clearly very strategic.
Albemarle (ALB)
Albemarle (NYSE:ALB) is a major provider of the lithium used in the production of EV batteries. The company continues to grow rapidly, with revenues, earnings and many other metrics all in the hypergrowth range.
At current prices, I believe Albermarle is an excellent opportunity. Despite the breakneck growth, Albemarle shares have fallen and remain not far from 2023 lows. Lithium price volatility is an ever-present concern and other firms are entering the space. Those factors are prime catalysts that have pushed shares lower. There’s legitimacy to those concerns, but in the short term, Albemarle is booming. Investors willing to play the short game stand to gain a lot, given that ALB shares trade at $190 but have eclipsed $290 in 2023.
Albemarle understands that volatility is inherent in the commodities business. The company established an agreement with Ford (NYSE:F) to supply over 100,000 metric tons of lithium hydroxide from 2026 to 2030. That steady demand may make it less volatile overall. That aside, Albemarle expects revenues to increase by 40% to 55% in 2023.
On the date of publication, Alex Sirois 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.
