As electric vehicles shift from the outskirts of the automotive sphere into the mainframe, battery-related enterprises continue to gain traction in the market. In fact, with the industry predicted to soar at a stellar compound annual growth rate of 10.07% through 2028, the trajectory appears nothing short of electrifying.
Echoing this sentiment, the International Energy Agency reports a surge in electric car demand, forecasting an amazing 35% spike in EV sales this year alone. While the spotlight shines on EV producers, savvy investors understand there’s significant potential tucked away in the vehicle’s core components.
Hence, for those aiming to rev up their portfolio, the real power play might be in those battery stocks to buy and hold. Let’s plug into these dynamic picks, setting the energy stage ablaze.
Lithium Americas (LAC)
A stock that promises to multiply in value within the next five years potentially is Lithium Americas Corp. (NYSE:LAC). With the Thacker Pass project in North America as its shining beacon, the project flashes an impressive after-tax net present value of $5.7 billion while boasting a 40-year mine life. The anticipated average annual EBITDA of $1.1 billion is even more compelling, with the Thacker Pass set to be a financial dynamo once operations kick-off.
Furthermore, the company’s business operations will be split into two divisions; as the Lithium Argentina unit sets its sights on the Cauchari-Oloroz lithium project, the Lithium Americas unit zeroes in on the Thacker Pass project in Nevada. This division will likely be sealed by October as the firm gains further momentum from its substantial $650 million investment. While LAC stock may have experienced a minor dip this year, its whopping 289% rise over the past five years cements its position as a formidable contender in its niche.
Albemarle (ALB)
Albemarle (NYSE:ALB) has established its position as a frontrunner in specialty chemicals manufacturing. The company continues to harness the power of lithium and other crucial raw materials, propelling its shares to almost double over the past five years. As EVs edge closer to becoming the norm, investors have all the right reasons to keep a keen eye on this stock.
A jaw-dropping 60% jump in net sales for the second quarter of 2023, clocking in revenues at a stellar $2.37 billion, proves Albemarle is more than just a blip on the radar. Moreover, it recently announced a strategic alliance with automotive titan Ford. The collaboration is expected to supply a spectacular 100,000 metric tons of lithium hydroxide from 2026 to 2030, ensuring robust demand for Albemarle’s output.
Amidst the ebb and flow of lithium prices and the unpredictable dance of market dynamics, Albemarle stands tall, powering ahead with unyielding confidence. With anticipated sales growth from 40% to 55% in 2023, Albemarle exemplifies the epitome of battery stocks worth considering.
Solid Power (SLDP)
Navigating the high-voltage landscape of EV battery stocks, one name that encapsulates the thrill of the battery market is solid-state battery maker Solid Power (NASDAQ:SLDP). The firm has the trappings of a battery stock that could soar to dizzying heights or experience turbulence.
Solid Power’s distinction lies in its pioneering role within the burgeoning solid-state battery sector. While most are familiar with lithium-ion batteries, solid-state batteries present a refreshing twist. These promise heightened safety and efficiency, placing them above conventional EV batteries. Additionally, these batteries bid adieu to pricy minerals such as nickel and cobalt, welcoming sulfur as the alternative. The potential cost savings from this shift could revolutionize the EV price tag, luring a broader customer base.
While the allure of lower EV costs paints a promising future, amplifying the demand for solid-state batteries, investors should tread cautiously. Solid Power, despite its leadership stance, remains a high-stakes play. However, solid-state batteries may well herald the dawn of a new EV era for those with an appetite for risk and an eye on the future.
On the date of publication, Muslim Farooque 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
