Demand for batteries is only set to accelerate. After all, according to the energy transition think tank RMI, “Battery demand is growing exponentially, driven by a domino effect of adoption that cascades from country to country and from sector to sector. This battery domino effect is set to enable the rapid phaseout of half of global fossil fuel demand and instrumental in abating transport and power emissions.” All of which is great news for battery stocks.
Helping, LG Energy Solution says global demand for energy storage system batteries could grow about 30% this year. Better, MarketsandMarkets says the electric vehicle market could be worth about $508.8 billion by 2033.
Investors may want to take advantage of down, but not out battery stocks for long-term growth potential. Remember, we have a world fighting to go green, which will only increase battery demand. Plus, once the Federal Reserve starts cutting interest rates, we could see a resurgence of EV sales moving forward. All of which need batteries.
Again, take advantage of the weakness in battery stocks for the long term.
Panasonic (PCRFY)
Panasonic (OTCMKTS:PCRFY) is one of the top battery stocks to buy and hold long-term. Granted, the stock did pull back after the company cut domestic EV battery production by 60% in October. But cuts were expected with the pullback in EV demand.
But again, remember, once the Federal Reserve cuts rates, things could improve.
The company wants to quadruple its EV capacity to 200 gigawatt hours by 2031, focusing strongly on North America. It also has plans to roll out new EV battery cells with better capacity. A newer version of its Panasonic 2170 cells will begin production at the plant it operates with Tesla (NASDAQ:TSLA) in Nevada.
Plus, earnings haven’t been too shabby. In its recent quarter, it posted EPS of 32 cents, which beat by 10 cents. And while revenue did slip 12.37% year over year to $14.7 billion, it still beat expectations by nearly $500 million. Analysts at Jefferies recently upgraded PCRFY to a buy rating, with a price target of 2,060 yen ($13.88) from 1,256 yen ($8.47).
Piedmont Lithium (PLL)
We can also look at Piedmont Lithium (NASDAQ:PLL), which is trying to advance its lithium mine in North Carolina. If it can, it could become one of North America’s biggest sources of lithium for EV batteries. Most recently, the company received an extension to provide further information necessary for completing the state’s review of its mine permit application. Once that’s secured, Piedmont Lithium could come back strong.
“The company said it expects to provide the additional information well before May and does not believe it will need more time to provide other information,” noted Seeking Alpha.
Although several firms have downgraded the stock’s price targets, a lot of weakness is already priced into the stock.
Helping, earnings haven’t been too shabby. “The third quarter was transformational for Piedmont as we made our first customer shipments under our offtake agreement with our joint-venture operation, North American Lithium. As a result, Piedmont became a revenue-generating lithium company and recorded adjusted net income of $17 million and adjusted earnings per share of $0.88,” as noted in its earnings release.
Global X Lithium & Battery Tech ETF (LIT)
If you want to diversify at a low cost, there’s always an ETF like the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT), which I often mention in battery and lithium articles. While its chart has been a disaster thanks to a lithium and battery stocks downfall, it’s cheated at $40.53. With patience, I’d like to see it initially retest at $52.50.
With an expense ratio of 0.75%, the LIT ETF invests in the complete lithium cycle—everything from mining and refining the metal through battery production. Some of its top holdings include Albemarle (NYSE:ALB), TDK (OTCMKTS:TTDKY), BYD (OTCMKTS:BYDDF) and Arcadium Lithium (NYSE:ALTM) to name a few.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
