Top Energy Storage Batteries Stocks
Energy storage batteries is a promising sector for investment. However, to profit from stocks buying, it is essential to choose the right company to invest in. We have prepared a detailed overview of the firms involved in battery manufacturing whose shares are worth your attention.See also: Top Energy Storage Companies | Storage News | Best Solar Storage Products | Top Energy Storage Batteries ETFs
Battery stocks are underestimated by investors due to a number of issues that discourage them from buying the shares of companies specializing in energy storage solutions. However, with the growing demand for long-cycle EV batts as well as efficient small-sized batts for portable electronic devices, the sector seems very promising for future investments.
Like any other sector, battery stocks have a considerable challenge – to select the proper firm worth your investment. No company is protected from potential failures, but to reduce the risks let’s take a look at the most promising players in the battery industry.
No analysis of energy stocks can be imagined without mentioning Tesla – a pioneer in the industries of solar power and e-vehicles as well as an undisputable leader of battery production in the automobile industry. The corporation has its own batt manufacturing plant – Gigafactory, and is planning to open new facilities in the near future.
The only problem about buying Tesla’s shares is their expensiveness. In 2020, the stock price has increased twice and continues growing.
In 2019, the company acquired Maxwell Technologies. Apart from production of ultracapacitors, the latter is also involved in RD of dry coating electrode tech for batts. Success in the technology development can improve efficiency of Li-ion batts, which would bring Tesla still further ahead of its rivals.
Panasonic Corporation (OTCMKTS:PCRFY)
Panasonic Corp offers a wide range of goods starting from TV sets to industrial equipment. The company has also shown interest in e-vehicles for a while.
The previous year and the beginning of the current one haven’t been favorable for the corporation so far. However, the perspectives for the future are promising.
The firm plans to cooperate with Toyota Motor in creating Smart homes. The new cooperation will extend the partnership, where Panasonic will specialize in domestic appliances and batts while Toyota is going to make home-assisting robots.
So far, Panasonic has only supplied batts for Toyota’s e-cars. In 2019, the companies established a joint venture producing batts for electric vehicles, where Panasonic is the owner of 49 percent of shares. The goal of the collaboration is boosting batt capacity by 50 times as well as the development of solid state EV batts to replace the currently used Li-ion ones. This is likely to raise Panasonic’s revenue.
Another Panasonic’s advantageous partnership is with Tesla. The corporations cooperate in manufacturing of batts at Gigafactory, which is intended to raise both firms’ sales of their products. This collaboration makes Panasonic attractive for those who would like to invest in Tesla but cannot afford it.
Albemarle specializes in performance chemicals and is performing RD of batt technologies. It is the leader in lithium production. Thus, in 2017, 36% of its total revenues came from selling lithium as well as Li hydroxide and carbonate.
In 2019, the firm’s EBITDA amounted to 226mln, while its revenue constituted 832mln. However, the company’s earning per share decreased by 5 percent to 450.23.
Anyway, Albemarle shares are not expected to remain 52-week low for a long time, due to the firm’s commitment to margins of 40 percent and the contracts signed for extended periods of time.
Thanks to the global growth of EV sales by nearly 60 percent, manufacturing of batts has risen, which has allowed the firm to perform 292mln lithium sales. For the rest of the year, the company experts forecast Li to be in much demand and the firm’s manufacturing to grow by 15-20 thousand metric tonnes, which is expected to raise its EBITDA by 17-19%.
Enphase Energy (NASDAQ:ENPH)
Enphase’s stock price has been experiencing year-high, having boosted from about 8 to the current price exceeding 50.
The company is first of all known as a microinverter manufacturer, having shipped almost a million products.
The firm is still growing revenue in spite of shortage of components supply, which means prospects for still faster growth as soon as the current challenges are solved.
Energizer Holdings (NYSE:ENR)
Energizer is not only a batt manufacturer. It intends to grow into a leading producer of varied household goods.
Throughout 2019, the company’s shares were priced 37.50-40.50. However, the new year has started with a stock price rise up to 50, though the coming crisis has put it back to 37. Being well-established in consumer batt and entering vehicle batt sector, the company has good chances to raise its stock price.
Solid-State Battery Stocks to Buy
All batt manufacturers are looking for innovative high-density solutions. A lot of RD has been made in the field. One of the promising techs is solid-state batteries. The pro of such batts is elimination of possible leakage and corrosion, which can result in fire. Besides, solid-state batts can potentially be smaller and lighter compared to traditional ones. However, there are still quite a few issues to solve with solid-states. The first type of solid-state products that has become available commercially is thin-film batts. Such nano-batteries are similar in design to normal secondary cells, but they are extremely flexible and thin, which makes them suitable for tiny electronic devices.
Front Edge Technology (FET) has partnered with STMicroelectronics (NYSE:STM) for developing a batt of 200-micrometer thickness, promising over a thousand cycles half-discharged. Privately-held Fisker, Inc. is planning to produce EV batts by 2022. BMW and Volkswagen groups are also working on solid-state technologies.
Below you can find the table containing the promising firms in the solid-state batt market.
An EV Battery Stock with Real Revenue
A company a subscriber brought to our attention recently is actually pulling in more revenue than all of the other EV battery manufacturers on this list combined. Founded in 2006 and nominally headquartered in Houston, Microvast (MVST) develops and manufactures EV battery technology for commercial vehicles. The company completed its SPAC merger last July and has subsequently lost more than half of its value since then. Revenue through the first nine months of 2021 hit about 85 million, and Microvast appears on pace to beat last year’s revenue of 107.5 million. However, it will likely fall well below the 174 million in 2018 revenue, and our overworked MBAs will need to investigate further to understand the dramatic swings in revenue.
In about 15 years of operation, Microvast has managed to integrate its various battery technologies into almost 30,000 EVs, running in 160 cities across 19 countries. So there is geographic diversification of revenues, though 87% is currently coming from China and the rest of the Asia Pacific region, with the remainder based in Europe. Big plans are in the works to expand operations in both Europe and the United States. Microvast ed 822 million from its SPAC merger with apparently no significant debt, so that’s quite the war chest to expand its manufacturing capabilities.
Using its current market cap of 450.5 billion and annualized revenues of 148 million (based on 37 million from Q3 results), our simple valuation ratio (market cap/annualized revenues) is 10. That’s well below our threshold of 40, but we would want to do more due diligence on this company before we decide to stake a position, especially since our Disruptive Tech Portfolio is already heavy on green technology.
An EV Battery Stock for Elves
We’re less keen at the moment on a Norwegian company, FREYR (FREY), which also completed its SPAC merger last July. Founded in 2018, the company seemed to mostly subsist off of government grants before it hit the SPAC jackpot with more than 700 million in gross proceeds to fund its first manufacturing facility somewhere just south of the Arctic Circle. The company has yet to commercialize the battery technology that it is actually licensing from a Boston area startup called 24M that has developed a semi-solid battery we keep running into over the years. Despite the fact that FREYR has zero revenue and plans to build its gigafactory close to Santa Claus (elves do work for free, after all), the company has managed to only lose about a fifth of its value since sealing the deal.
The State of Solid-State EV Battery Stocks
Lithium-ion batteries are the default energy storage option for EVs today, but plenty of companies are working on new designs and chemistries to boost energy density and safety, while dropping costs and the time required to charge. One of the leading contenders is the solid-state battery, which replaces liquid chemicals with “solid” materials.
Probably the company that has generated the most buzz among EV charging SPAC stocks is Silicon Valley-based QuantumScape (QS), partly for some of the names attached to its list of investors. Chief among them is Volkswagen, which has invested at least 300 million and has a 19% stake in the company. QS and VW also formed a joint venture to establish a manufacturing facility to produce the pilot line of QuantumScape’s solid-state lithium battery. Another notable name attached to the company is Breakthrough Energy Ventures, the billionaire club trying to save the planet. Names don’t wow us; fast-growing revenues and solid business plans do. QS is still pre-revenue and the current business is mostly predicated on its relationship with Volkswagen.
The stock benefited from being one of the earliest on the SPAC crazy train, trading well above the 10 per share baseline before the merger was completed in November 2020. The stock has been on a steady decline ever since we briefly profiled it more than a year ago but, amazingly is still more than 40% above the SPAC default price, despite the fact that commercialization won’t begin until between 2024 and 2025. We’ll probably be drinking camel milk fermented from microbes if and when QS starts generating significant revenues.
Another company with a long time horizon that is developing solid-state battery technology for EVs is Solid Power (SLDP), a company we recently profiled as a pure play on a solid-state EV battery. It premiered on the Nasdaq just last month and has already lost about half of its value in little more than a month. In theory, Solid Power has a shorter pathway to start generating revenues by licensing its cell designs and manufacturing know-how to third-party commercialization partners. The company is also banking on selling its proprietary battery materials, especially to its partners, BMW and Ford. Currently, revenues are about 5000 to 3 million annually.
While retail investors may be tempted to invest in QuantumScape or Solid Power based on the marquee names attached to their operations, keep in mind these sorts of deals fall apart all the time. In addition, these major automakers usually hedge their bets with other partnerships and deals.
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Poised to grow at a CAGR of 19.9%
Battery Type, Li-Ion Battery Component, Propulsion, Vehicle Type, Method, Battery Capacity, Material Type, Battery Form, And Region
Increasing demand for electric vehicles
Introduction of the battery-as-a-service model (BaaS)
North America, Europe, Asia Pacific, and Rest of the World
This research report categorizes the EV battery market based on battery type, li-ion battery component, propulsion, vehicle type, method, battery capacity, material type, battery form, and region.
Based on the Battery Type:
- Nickel-metal Hydride
Based on the vehicle type:
- Passenger Cars
- Vans/Light Trucks
- Medium Heavy Trucks
- Off-highway Vehicles
Based on the material type:
Based on the region:
- Asia Pacific
- South Korea
- United Kingdom
- In July 2022 Samsung SDI began the construction of its second battery production facility in Seremban, Malaysia. This plant will start producing PRiMX 21700 cylindrical batteries in 2024. The company will invest USD 1.4 billion in stages till 2025. The batteries produced at the plant will be primarily used for electric vehicles (EV), micro mobility, and various other applications.
- In June 2022 Heilongjiang Transport Development Co., Ltd. (Heilongjiang Transport) announced a partnership with Contemporary Amperex Technology Co., Ltd. (CATL). Both the players are conducting surveys in several sectors for cooperation, involving battery charging and swapping for heavy trucks, battery swapping for online ride-hailing cabs, battery charging and swapping for cruising cabs, and photovoltaic power.
- In May 2022 CATL partnered with European leading electric bus manufacturer Solaris to promote electrification of city transportation in Europe. CATL will be supplying lithium iron phosphate (LFP) batteries equipped with novel Cell to Pack (CTP) technology to Solaris to power its bus models.
- In December 2021 CATL and Fisker Inc. has signed an agreement. Under the agreement, CATL will provide two battery solutions for the Fisker Ocean SUV from 2023 to 2025 with an initial battery capacity of over 5GWh annually. The battery packs provided by CATL will include large NMC (nickel manganese cobalt) battery packs and small LFP (lithium-ion phosphate) battery packs.
- In August 2020, CATL announced to develop a new EV battery with no nickel or cobalt in it. The company focuses to save a major portion of the cost with this development as cobalt is one of the most expensive components in an EV battery.
- In November 2020, Samsung SDI announced that it will be commercializing a li-ion battery product that would replace liquid electrolyte in a battery cell with a solid electrolyte, which improves battery performance.
- In March 2020, BYD announced the launch of a blade battery system, which consists of thin individual batteries. The thickness of a single battery is around 1.35 cm and occupies 50% less space than earlier products.
- In July 2020, Panasonic Holdings Corporation announced the development of a technique to visualize lithium-ion dynamics in all-solid-state batteries on a nanometer scale in real-time, in collaboration with Japan Fine Ceramics Center (JFCC) and Institute of Materials and Systems for Sustainability, Nagoya University. The technique, which makes use of scanning transmission electron microscopy (STEM) and machine learning, was applied to both bulk-type and thin-film-type all-solid-state lithium-ion batteries.
- In December 2019, Samsung SDI acquired an additional 15% stake in Samsung SDI-ARN (Xi’an) Power Battery Co., Ltd (SAPB) making it the majority stakeholder in the company with 65% of ownership. SAPB was initially found in 2014 by Samsung SDI Anqing Ring New Group and Xi’an Gaoke Group.
- In July 2020, LG Chem declared that it would reuse and recycle its used batteries proactively. LG Chem would research and develop technologies to predict the remaining life by collecting the batteries supplied to customers.
- In October 2020, CATL and RCS Global Group announced a partnership that would identify CATL’s cobalt, lithium, and graphite suppliers. The partnership would expand to cover aluminum, copper manganese, and nickel suppliers in the future. RCS Global would assess the suppliers for conformance with environmental and human rights requirements and work with CATL and the suppliers to develop a responsible supply chain.
Frequently Asked Questions (FAQ):
How big is the EV battery market?
The global EV battery market is projected to grow at a CAGR of 19.0% from USD 56.4 billion in 2022 to USD 134.6 billion by 2027.
Who are the winners in the global market?
CATL (China), Panasonic (Japan), LG Chem (South Korea), BYD (China), and Samsung SDI (South Korea) are the leaders of market. The key strategies adopted by these companies to sustain their market position are new product developments, mergers acquisitions, partnerships, expansions, collaborations, acquisitions, and contracts agreement.
What are the different types of battery types for electric vehicles?
Battery types are usually segmented into lithium-ion, lead-acid, solid-state, and nickel-metal hydride.
What are the different battery forms considered in the market?
The market has been segmented by battery forms into cylindrical, prismatic, and pouch. The prismatic cell form is the most commonly used cell form in the EV battery. Although cylindrical and pouch cells are among the oldest types of battery forms, prismatic cells account for a large market share in the current scenario. Prismatic cells result from a slight modification of both forms with internal layer structure like that of the cylindrical cell and space utilization as much as the pouch cells. Recently, Tesla Motors announced a new ‘Tab-less’ battery, which is a modification of the cylindrical battery structure on the Tesla Battery Day
To speak to our analyst for a discussion on the above findings, click Speak to Analyst
TABLE OF CONTENTS
1 INTRODUCTION (Page No 26) 1.1 STUDY OBJECTIVES 1.2 MARKET DEFINITION 1.2.1 EV BATTERY MARKET DEFINITION, BY BATTERY TYPE 1.2.2 MARKET DEFINITION, BY LI-ION BATTERY COMPONENT 1.2.3 MARKET DEFINITION, BY PROPULSION 1.2.4 MARKET DEFINITION, BY VEHICLE TYPE 1.2.5 MARKET DEFINITION, BY MATERIAL TYPE 1.2.6 MARKET DEFINITION, BY METHOD 1.2.7 MARKET DEFINITION, BY BATTERY FORM 1.3 INCLUSIONS EXCLUSIONS TABLE 1 INCLUSIONS EXCLUSIONS FOR MARKET 1.4 MARKET SCOPE FIGURE 1 MARKET SEGMENTATION: MARKET 1.4.1 YEARS CONSIDERED 1.5 CURRENCY CONSIDERED TABLE 2 CURRENCY EXCHANGE RATES (PER USD) 1.6 STAKEHOLDERS 1.7 SUMMARY OF CHANGES
2 RESEARCH METHODOLOGY (Page No 35) 2.1 RESEARCH DATA FIGURE 2 RESEARCH DESIGN FIGURE 3 RESEARCH METHODOLOGY MODEL 2.1.1 SECONDARY DATA 22.214.171.124 Key secondary sources 126.96.36.199 Key data from secondary sources 2.1.2 PRIMARY DATA 188.8.131.52 Key data from primary sources 184.108.40.206 List of participating companies for primary research 220.127.116.11 Key industry insights FIGURE 4 BREAKDOWN OF PRIMARY INTERVIEWS: BY COMPANY TYPE, DESIGNATION, AND REGION 18.104.22.168 List of primary participants 2.2 MARKET ESTIMATION METHODOLOGY FIGURE 5 RESEARCH METHODOLOGY: HYPOTHESIS BUILDING 2.3 MARKET SIZE ESTIMATION 2.3.1 BOTTOM-UP APPROACH FIGURE 6 GLOBAL EV BATTERY MARKET SIZE: BOTTOM-UP APPROACH 2.3.2 TOP-DOWN APPROACH FIGURE 7 MARKET SIZE ESTIMATION METHODOLOGY FOR MARKET: TOP-DOWN APPROACH FIGURE 8 MARKET: RESEARCH METHODOLOGY ILLUSTRATION OF Samsung SDI REVENUE ESTIMATION 2.3.3 FACTOR ANALYSIS FOR MARKET SIZING: DEMAND AND SUPPLY SIDES 2.4 DATA TRIANGULATION FIGURE 9 DATA TRIANGULATION 2.5 FACTOR ANALYSIS 2.6 RESEARCH ASSUMPTIONS 2.7 RISK ASSESSMENT 2.8 RESEARCH LIMITATIONS
3 EXECUTIVE SUMMARY (Page No 50) FIGURE 10 PASSENGER CARS SEGMENT ESTIMATED TO LEAD MARKET FROM 2022 TO 2027 FIGURE 11 EV BATTERY MARKET, BY REGION, 2022–2027
4 PREMIUM INSIGHTS (Page No 52) 4.1 OPPORTUNITIES FOR PLAYERS IN MARKET FIGURE 12 INCREASING ADOPTION OF ELECTRIC VEHICLES AND GROWING GOVERNMENT INCENTIVES TO DRIVE MARKET 4.2 MARKET, BY VEHICLE TYPE FIGURE 13 PASSENGER CARS SEGMENT EXPECTED TO DOMINATE MARKET DURING FORECAST PERIOD 4.3 MARKET, BY PROPULSION FIGURE 14 FCEV SEGMENT PROJECTED TO REGISTER HIGHEST CAGR DURING FORECAST PERIOD 4.4 MARKET, BY BATTERY FORM FIGURE 15 PRISMATIC SEGMENT EXPECTED TO LEAD MARKET FROM 2022 TO 2027 4.5 MARKET, BY MATERIAL FIGURE 16 LITHIUM SEGMENT ESTIMATED TO LEAD MARKET IN 2022 4.6 MARKET, BY LI-ION BATTERY COMPONENT FIGURE 17 ELECTROLYTE SEGMENT PROJECTED TO LEAD MARKET FROM 2022 TO 2027 4.7 MARKET, BY BATTERY CAPACITY FIGURE 18 50–110 KWH SEGMENT EXPECTED TO LEAD MARKET DURING FORECAST PERIOD 4.8 MARKET, BY BATTERY TYPE FIGURE 19 LITHIUM-ION BATTERY SEGMENT ESTIMATED TO BE LARGEST BATTERY TYPE SEGMENT IN 2022 4.9 MARKET, BY REGION FIGURE 20 ASIA PACIFIC ESTIMATED TO ACCOUNT FOR LARGEST MARKET SHARE IN 2022
Secondary sources referred to for this research study include publications from government sources [such as country level automotive associations and organizations, Organisation for Economic Co-operation and Development (OECD), World Bank, CDC, and Eurostat]; corporate and regulatory filings (such as annual reports, SEC filings, investor presentations, and financial statements); business magazines and research journals; press releases; free and paid automotive databases The International Energy Agency, EV-volumes, Alternative Fuels Data Center (AFDC), the European Alternative Fuels Observatory (EAFO), and other associations/organizations. Secondary data was collected and analyzed to arrive at the overall size of the global market, which was validated by primary research.
Extensive primary research was conducted after acquiring an understanding of the global EV battery market scenarios through secondary research. Several primary interviews were conducted with market experts from both the demand (country-level government associations, and trade associations, institutes, RD centers, OEMs/vehicle manufacturers) and supply (EV battery manufacturers, EV component manufacturers, and raw material suppliers) side across three major regions, namely, North America, Europe, and Asia Pacific. 23% of the experts involved in primary interviews were from the demand side, and 77% were from the supply side of the industry. Primary data was collected through questionnaires, emails, and telephonic interviews. Several primary interviews were conducted from various departments within organizations, such as sales, operations, administration, and so on, to provide a holistic viewpoint in the report.
After interacting with industry participants, some brief sessions were conducted with experienced independent consultants to reinforce the findings from the primaries. This, along with the in-house subject matter experts’ opinions, has led to the findings delineated in the rest of this report.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
The bottom-up and top-down approaches were used to estimate and validate the size of the global EV battery market. In these approaches, the electric vehicle sales statistics for each vehicle type (passenger cars, vans/light trucks, medium heavy trucks, buses, and off-highway vehicles) at a country level were considered.
In the bottom-up approach, the number of electric vehicle sales of each vehicle type at the country level was considered. The number of batteries per vehicle was identified through model mapping and secondary research. The sale of electric vehicles at the country level was then multiplied with the number of batteries in each vehicle type to determine the market size of the EV battery market in terms of volume. An average battery capacity was identified for each vehicle type through secondary and primary research. The country-level market size, in terms of volume, by vehicle type, was then multiplied with the country-level average battery price per kWh (ABP) of each vehicle type and average battery capacity to determine the market size in terms of value for each vehicle type. The summation of the country-level market size for each vehicle type, by volume and value, would give the regional level market size. The summation of the regional markets provides the global EV battery market size. The market size for vehicle type was derived from the global market.
The top-down approach was used to estimate and validate the size of the EV battery market, by battery type, battery form, method, material type, and li-ion battery component. To derive the market size by type, the global market size in terms of volume and value was divided into lead-acid, nickel-metal hydride, solid-state, and li-ion using the penetration and percentage split respectively. The global market was further segmented at the regional level. A similar approach was used to derive the market size of battery type, battery form, method, material type, and li-ion battery component segments in terms of volume and value.
Investing in EVs
While overall car sales were curbed somewhat in 2022, the road appears to be getting smoother of late—particularly for electric vehicles (EVs). Indeed, global electric car sales sped up 60% last year to surpass 10 million for the first time ever, despite broader car sales headwinds as well as rising battery prices. 1 Most auto market analysts think EVs are on the fast track to accelerate in the years ahead.
Here’s where the EV market stands, and what roadblocks EV investors could face.
EV sales speed up
EVs represented a growing percentage of total car sales last year in the world’s 3 largest auto markets—China (25%), the European Union (20%), and the US (10%). 1 However, they still accounted for a relatively small percentage of total car sales, leaving a lot of room for growth (see Passenger car sales chart).
Passenger car sales
Source: IEA, as of February 28, 2023.
Automakers are clearly anticipating that potential growth in EV share: There are now over 400 electric car models globally (notably, roughly 55% of these models were SUVs, a 40% increase from 2018). 1 Here’s a list of 2022’s top-10 selling plug-in electric vehicle models worldwide: 2
- Tesla Model Y
- BYD Song Plus
- Tesla Model 3
- Wuling Hong Guang MINI EV
- BYD Qin Plus
- BYD Han
- BYD Dolphin
- BYD Yuan Plus
- Volkswagen ID.4
- BYD Tang
The expectation that EV sales for these and other models may grow at an exponential pace in the coming years is due primarily to shifting consumer preferences, public and private investment in building out the electric vehicle ecosystem, and technological improvements, plus other factors. If this trend continues as expected, there remain big investing implications.
Federal support from governments around the globe in particular has helped propel the EV market. Tax credits for electric vehicle purchases, for instance, have been a major catalyst helping spur consumer demand. recently, several governments in Asia, North America, and Europe have passed major legislation targeting the EV ecosystem to help accelerate the transition from gas-powered cars to electric vehicles. For example, the US Infrastructure Investment and Jobs Act that passed in 2021 allocated 15 billion for electric vehicle infrastructure.
Advancements in battery technology have been another critical component of the EV revolution. As range capacity has increased over the years, due primarily to innovations in battery technology, so too has consumer’s acceptance of electric vehicles. It was less than 20 years ago that electric vehicles were powered by lead-acid batteries with a roughly 55-mile max range capacity. Today’s lithium-ion technology (which has been the main type of EV battery since the late 2000s) currently has a max capacity of roughly 10 times the old lead-acid battery for some EVs.
Looking past liquid electrolyte-based lithium-ion technology, some industry insiders—including Tesla cofounder Martin Eberhard—have expressed optimism for emerging technologies, such as solid-state batteries. Solid-state batteries replace the liquid electrolyte with a solid electrolyte, potentially resulting in lower costs and a lengthening of the battery life cycle.
The expanding EV universe
In addition to the biggest automobile manufacturers in the world shifting into gear in the EV market—including SAIC Motor,BMW ( ), Honda ( ), General Motors ( ), Ford (. Toyota ( ), Hyundai ( ), Volkswagen ( ), and Porsche ( )—there are more pure EV makers than ever before. These relatively newer companies have made significant inroads to capture EV market share—especially in China.
Here are the 10 largest automakers by market cap who produce only electric vehicles: 2
The rise of these pure EV companies has been staggering. Tesla is already the largest publicly traded automaker in the world with a market cap of under 700 billion, as of mid-February 2023. Rivian made big news in late 2021 immediately after its IPO valued the company at nearly 14 billion—despite at the time not having delivered a single car to customers yet.
But it’s not just the new entrants and startups with their potentially lofty valuations that have pushed the EV market into the next gear. All of the legacy automakers have made significant strides ramping up their EV offering. As a result, consumers have more choices among EVs than ever before.
EVs and ETFs
If you are interested in exploring an electric vehicle-focused ETF, Fidelity offers the Fidelity Electric Vehicle and Future Transpo ETF ( ). Holdings information may be obtained by clicking the fund trading symbol.
The top 10 holdings of this fund, as of 3/31/2023, are:
- Tesla – 4.77%
- NXP Semiconductors – 3.88%
- STMicroelectronics – 3.70%
- Samsung SDI – 3.64%
- ON Semiconductor – 3.59%
- Aptiv – 3.41%
- LG Energy Solution – 3.20%
- NIO – 3.05%
- Skyworks Solutions – 2.88%
- Garmin – 2.85%
Can any bumps in the road slow down EVs?
An impressive aspect for the EV market has been its resilience in the face of the global supply chain headwinds that have impacted car makers, as well as a range of other businesses. Cars contain thousands of components, and despite supply issues across a spectrum of these components, 2022 was a record year for EVs—and 2023 is expected to be even better.
With that said, there are reasons for investors to be cautious. Not only are supply chain issues continuing to cause some shortages and delays for automakers, relatively higher input remain a factor that threatens to curb margins over the near term. For instance, key battery components including lithium carbonate, graphite, and nickel have all increased in price relative to several years ago. Of course, improvements in battery technology have been helping bring down over time, partially offsetting the uptick in input prices. Nevertheless, new car have increased substantially over the past several years, potentially pricing out many buyers.
Another risk that remains is the EV market’s reliance on government support. While many governments around the world are increasingly focusing on EV infrastructure, EV car sellers still depend to a great extent on tax credits and other policies. Just as subsidies and other governmental support for oil and gas industries help support the traditional gas engine market, the EV market relies to a great extent on the public-private partnership.
Nevertheless, trends in the electric vehicle market appear to be stronger than ever.