The electric vehicle (EV) industry saw price drops amid changes, but the recent demand dip is expected to be temporary. With critical mass achieved, a steep demand increase is imminent. This makes it a prime time to invest in solid-state battery stocks. The need for lithium in current and future batteries adds to the investment potential.
Investors shifting to a net-zero carbon world can diversify beyond EV, hydrogen fuel cell, and solar stocks with battery stocks. Advanced battery tech is crucial for the fossil fuel transition. However, careful stock selection is necessary for potential profitability, as seen in the following recommended battery stocks to buy now.
Li Auto (LI)
Li Auto (NASDAQ:LI) stands out amid EV makers cutting production targets, thriving despite inflation and low demand.
In Q3, it achieved a remarkable $4.75 billion in revenue. This is up 271% year over year (YOY), with a net income of $385.5 million. Delivering 105,108 vehicles, a 296% YOY increase, Li Auto aims for 125,000 to 128,000 deliveries in Q4. In fact, it has already delivered 81,452 cars in the last two months.
And, on a social networking site, Li Auto’s Chairman and CEO Li Xiang addressed market concerns about marketing costs. He asserts that LI AUTO has the lowest such rates among all Chinese car brands. Li claimed that the only company globally with a lower rate is Tesla (NASDAQ:TSLA).
In other recent LI news, Li Xiang claimed LI has the lowest marketing expense ratio among Chinese automakers. This sparked online discussions. Also, NIO executive Ma Lin shared details on Li Auto’s Douyin platform advertising expenses. Ma Lin emphasizes the importance of research and development costs and cost-effectiveness. So, this places Li Auto in a brighter light.
Nio (NIO)
Nio (NYSE:NIO), the EV manufacturer, is now listed in a Chinese industry ministry database allowing vehicle production. Details whether or not Nio received a manufacturing license were not provided.
Further, this move addresses uncertainties linked to Anhui Jianghuai Automobile Group’s plans to sell assets from the factories producing Nio EVs. This is a situation Nio previously stated wouldn’t impact its future production activities
Also, Nio witnessed a substantial 59.8% increase in vehicle deliveries to 16,074 in October. Acknowledging the need to address losses, the company opted to trim its workforce by 10%. This targets labor cost reductions, a critical fixed expense. Nio remains a promising investment, emphasizing automation and AI-automated robots to cut labor costs further. These aim for a 1/3 reduction in workforce by 2027.
Finally, NIO demonstrates strength where Tesla faced challenges. Deliveries increased by 12.6% YOY, totaling 15,959 vehicles. In fact, NIO is notably more cost-effective than TSLA. With a P/S ratio of 1.90 compared to TSLA’s 7.91, it has a market cap of $12.72 billion versus TSLA’s $759.22 billion. Despite being unprofitable, NIO’s robust sales growth suggests potential as a better value pick for investors seeking optimized risk-adjusted returns.
Surge Battery Metals (NILIF)
Finally, Surge Battery Metals (OTCMKTS:NILIF) emerges as a key player in lithium mining in North America.
The company’s Nevada project, quietly gaining attention, revealed high-grade lithium clay in 2022 drilling. Surge Battery Metals has submitted plans for its lithium discovery. And, the 2023 program aims to extend the strike length beyond 11,480 feet, pending full assay results.
In October 2022, Surge Battery Metals uncovered a 5,300-foot lithium-rich clay zone at its Nevada North Lithium Project. CEO Greg Reimer prioritized sustainability, collaborating with Kautz Environmental Consultants. Positive stock signals, including a key buy indicator, were noted.
Regulatory approval from M3 Metals Corp (OTCMKTS:MLGCF) for Surge’s October option agreement allowed a potential 20% interest in M3M Lands, with an extra 10% possible through added payment and share issuance. Thus, this places NILIF in a good position for the coming years.
On the date of publication, Chris MacDonald 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.
