When investors think about battery stocks as investments, their first thought is likely to be the lithium-ion batteries that are essential to electric vehicles (EVs). But if you’re looking for companies that may be worth a long-term investment, you may have to shift your focus.

Since 2020, a number of startup companies are trying to capitalize on the transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs). Many of these companies have been involved in the production of lithium-ion batteries, which is the current standard for EVs.  

The hope was that many of these battery stocks would be solid long-term investments. The reality is most of them may have made good trades at one time or another, but they’ve been tough stocks to hold.  

This is still a speculative area, but it’s one that still holds significant promise. The shift towards renewable energy will continue. However, it may be time for investors with a long-term outlook to consider these battery stocks.  

Tesla (TSLA)

First, to help frame my case for Tesla (NASDAQ:TSLA) it’s important to look at Apple (NASDAQ:AAPL).  

The latter company is known for its iconic iPhone and other products. But as Apple investors are aware, it generates a significant portion of its revenue from its Services business.  

In a similar vein, Tesla enthusiasts have continually defended the company’s lofty valuation with the idea that Tesla is more than a car company. And a significant piece of that story is the company’s Energy Generation and Storage business. In its first quarter 2024 earnings presentation, the company noted that business was likely to generate a stronger growth rate than its Automotive business.  

A 36% rally in the last month has pushed TSLA stock positive for the year. Many investors continue to be fixated on its EV business and with good reason. However, if you have a contrarian state of mind, it could be a time to hope that Tesla begins to resemble the next Apple in the minds of investors.  

QuantumScape (QS) 

Investors frequently buy the rumor and sell the news. But it was news of a new agreement with PowerCo, a wholly owned subsidiary of Volkswagen  (OTCMKTS:VWAGY) that sent shares of QuantumScape (NYSE:QS) rocketing higher.  

The deal will allow PowerCo to utilize QuantumScape’s QSE-5 solid-state technology to manufacture batteries. You can learn about the details of the deal in Eddie Pan’s article for InvestorPlace. But a key takeaway is that PowerCo will provide QuantumScape with an initial $130 million royalty fee.  

This comes at a critical time as QuantumScape is in the final stages of pushing its solid-state battery design into commercial production. If successful, the company’s technology could become a replacement to the lithium-ion standard.  

Notably, the recent surge in QS stock is due in part to a short squeeze. That may not be enough to move analysts to push the stock higher. However, QuantumScape reports earnings on July 24. Investors looking to start a position should wait to gauge analyst sentiment after the earnings report.  

Nano One Materials (NNOMF) 

If QuantumScape isn’t speculative enough, you may want to consider Nano One Materials (OTCMKTS:NNOMF). The Canadian company’s proprietary and patented One-Pot process is working on removing sulphates from lithium-ion batteries that can lower the costs, complexity, carbon intensity and their environmental footprint.  

Sodium sulphate is a by-product of the EV battery supply chain. The growing market for battery electric vehicles (BEVs) is expanding this supply chain which is raising awareness of what to do with larger quantities of sodium sulfate.

NNOMF is a penny stock today, but it’s taken investors on a wild ride in the last five years. Like may companies related to EVs, the stock got caught up in the meme stock mania in 2022. And even last year, the stock was up approximately 40% at one point. But as consumer sentiment for EVs is cooling for many reasons, the stock is down 48% this year.  

That’s why you have to know what you own. This is a speculative investment. But if the company’s technology can gain a foothold with EV manufacturers, it could be a multi-bagger.  

On the date of publication, Chris Markoch had a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.