In this article, we will be taking a look at the 10 best EV battery stocks under $10. To skip our detailed analysis of the EV battery sector, you can go directly to see the5 Best EV Battery Stocks Under $10.
According to a United Nations Environmental Program (UNEP) report, human activity over the past 200 years has put the world at risk of environmental catastrophe. Because of human actions, the current temperature is 1.1 degrees Celsius above pre-industrial levels and might get warmer if something is not done. This is the justification for the global push towards renewables.
The global automotive industry is among those spearheading the push towards net zero, and electric vehicles (EVs) are the most potent tool in the list of options. In less than two decades, the EV market has grown exponentially. According to the International Energy Agency (IEA), there were a few hundred EVs on roads globally a few years ago, but the number hit the 10 million mark in 2020.
What does this mean for the EV battery market? First, the EV market cannot exist without battery companies. In other words, EV battery companies benefit significantly with every year of exponential growth of EV sales. And this correlation is reflected in the EV battery market valuation.
According to an IEA analysis, up to 40% of an EV's value is taken up by the battery. Two decades ago, the EV battery market was practically infeasible, meaning an EV battery company could not confidently claim to foresee future growth in the late 90s. But things are different now. For example, according to IEA, the global battery demand reached a few units shy of 350 GWh in 2021, double the demand in 2020. Interestingly, the global battery demand in 2015 was barely 50 GWh and even lower (less than 10 GWh) just ten years prior.
As noted in a previous article, the addressable market for EV batteries continues to grow. In fact, it was highlighted that even with some near-term challenges, the EV battery segment remains one of the hottest investment themes. And this is likely to hold true through decades as governments make a big push toward green mobility. Several reports support this position. For example, Fortune Business Insights™ valued the global EV battery market at $37.91 billion in 2021 and the market is projected to expand at a 10.5% CAGR to $98.97 billion in 2029. Another study by Apollo Research Reports makes a bolder claim. It valued the global EV battery market at $34 billion in 2022 and claimed it would expand at a 15.4% CAGR to $141.6 billion by 2032. The bottom line is that the addressable market is vast and that groundbreaking innovations will drive growth for companies operating in this market.
This growth is giving rise to several investment opportunities in the space. The Lithium & Battery Tech ETF (NYSEMKT:LIT), a Global X ETF focused on companies operating in the global EV battery market, was established in 2010 and has a cumulative net asset value of 141.85% since its inception. Also, the ETF has a 23.80% ROE compared to the S&P 500's 21.17% in 2022.
While many EV battery stocks, such as Tesla, Inc. (NASDAQ:TSLA), Samsung Electronics Co Ltd. (OTCMKTS:SSNLF), and Toshiba Corporation (OTCMKTS:TOSYY), have gained immense value due to rising demand for batteries, the stocks are on the expensive end. This also means they have a smaller scope for growth compared to cheaper stocks. On the contrary, cheaper EV battery stocks like Panasonic Holdings (OTCMKTS:PCRFY), Solid Power, Inc. (NASDAQ:SLDP), and Nio, Inc. (NYSE:NIO) have a wider scope for growth.
Best EV Battery Stocks Under $10
Our Methodology
We scanned Insider Monkey's database of 943 hedge funds and picked top 10 companies that produce materials used in EV batteries, make EV battery technologies or are directly involved in the EV battery space.
CBAK Energy Technology, Inc. (NASDAQ:CBAT) is a China-based investment holding company interested in manufacturing lithium-ion batteries, mainly for electric vehicles.
The long experience in the EV battery market has enabled CBAK Energy Technology, Inc. (NASDAQ:CBAT) to develop advanced technology and R&D capabilities through heavy investment in experienced engineers and scientists focused on developing new and innovative battery technologies. The company leverages strategic partners in different countries to increase its visibility and credibility in the market and lead to new business opportunities. For example, it partnered with Welson Power to target the Indian market. These and many other competitive advantages, including manufacturing scale, provide a solid foundation for the stock to take off. This could be why analysts on average have a ‘Hold’ rating on the stock, up from ‘Sell’ a month ago.
At the end of the fourth quarter of 2022, 3 hedge funds in the database of Insider Monkey held stakes worth $275,000 in CBAK Energy Technology Inc (NASDAQ:CBAT), down from 4 in the preceding quarter worth $955,000.
Like Panasonic Holdings (OTCMKTS:PCRFY), Solid Power, Inc. (NASDAQ:SLDP), and Nio, Inc. (NYSE:NIO), CBAK Energy Technology Inc (NASDAQ:CBAT) is one of the best EV battery stocks under $10.
Ultralife Corp. (NASDAQ:ULBI) designs and manufactures high-performance power and communications solutions for mission-critical applications in the defense, industrial, medical, and EV battery markets. The American company has many strengths, including a diversified product portfolio, strong customer relationships, innovation, and growing demand for EV batteries. With the stock price depressed at the moment, investors can leverage the growth potential to generate comfortable returns.
Most importantly, Ultralife Corp. (NASDAQ:ULBI) has a strong reputation for growing via acquisitions and sourcing robust partnerships. For instance, the company received a $5 million contract to supply its vehicle communications systems to a global prime defense contractor for the US Army. The contract firmed the company's financial position, enabling it to pursue further strategizing regarding the EV battery market.
There were 3 hedge funds in our database that held stakes in Ultralife Corp. (NASDAQ:ULBI)'s at the end of the fourth quarter, compared to 1 fund in the third quarter. Ken Griffin’s Citadel Investment Group is Ultralife Corp. (NASDAQ:ULBI)’s most significant stakeholder, with 20,063 shares worth $77,443.
Westwater Resources, Inc. (NYSE:WWR) is a US-based mining company primarily focused on exploring and developing green energy materials. The company stands eighth on our list of the 10 best EV battery stocks under $10. Initially, the company heavily focused on uranium but transitioned to lithium and graphite in the last decade through strategic acquisitions. While Westwater Resources, Inc. (NYSE:WWR) is still in the early stages of its development regarding green energy materials, it has several competitive advantages that could help it succeed in the industry.
Westwater Resources, Inc. (NYSE:WWR)'s diversified portfolio cushions its operations against the volatility in the EV battery market. Also, Westwater Resources has access to high-grade graphite deposits in the US, including the Coosa Graphite Project in Alabama. Additionally, the company continues to enter strategic partnerships, such as a recent agreement with a Tier 1 battery manufacturer for electric vehicles, to bolster its business.
At the end of the fourth quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $328,000 in Westwater Resources, Inc. (NYSE:WWR), the same as in the previous quarter, worth $535,000.
Proterra Inc (NASDAQ:PTRA) is also based in the US. The company manufactures heavy-duty electric vehicles and battery systems, including electric buses, charging stations, and energy storage solutions. The company has several competitive strengths that make it a potential long-term investment opportunity. Proterra Inc (NASDAQ:PTRA)'s innovative battery technology enables fast charging and long battery life, giving it an edge in the market. Also, Proterra has established partnerships with major players in the EV industry, boosting the bottom line.
Additionally, Proterra Inc (NASDAQ:PTRA)'s integrated solution, which includes electric vehicles, charging stations, and energy storage systems, could position the company as a leader in the rapidly growing EV market. Although Proterra Inc (NASDAQ:PTRA) may face challenges in maintaining its competitive position, its focus on sustainability and climate change solutions makes it an attractive long-term investment option for environmentally-conscious investors. Analysts have a ‘Moderate Buy’ rating on the stock, with 2 Buy, 1 Hold, and 0 Sell.
Of the 943 hedge funds tracked by Insider Monkey, 7 funds reported owning stakes in Proterra Inc (NASDAQ:PTRA) in Q4 2022, compared with 8 in the preceding quarter. Among these hedge funds, Cowen Group’s Ramius is the company’s most notable stakeholder, with 10.58 million shares worth $398.7 million.
Standard Lithium Ltd (NYSE:SLI) is a Canadian company that develops and commercializes advanced lithium extraction technologies to supply the EV battery market. The company has several strengths that could give it a competitive advantage in the market. It uses an innovative lithium technology, which is scalable and could provide a cost-effective and sustainable source of lithium for the EV battery market. It has strong partnerships, including Lanxess Corporation, Tetra Technologies, and global chemical company BASF. It has a diversified portfolio of lithium projects in different geographies, including Arkansas, California, and Canada.
Roth MKM analyst Joe Reagor lowered his price target on Standard Lithium Ltd (NYSE:SLI) to $9 from $16 on February 13, citing a potential timing delay in first production due to negotiations for land access with LANXESS taking longer than expected. However, the analyst kept a Buy rating on the shares and remained positive on the stock's long-term prospects, citing a number of positive catalysts on the horizon as Standard Lithium advances its projects towards development.
The outlook for Standard Lithium Ltd (NYSE:SLI) from hedge funds improved in Q4 2022. A total of 7 hedge funds tracked by Insider Monkey reported owning stakes in Standard Lithium Ltd (NYSE:SLI) as of the end of the period, compared to 3 funds that had stakes in Standard Lithium Ltd (NYSE:SLI) at the conclusion of the third quarter of 2022.
Along with Panasonic Holdings (OTCMKTS:PCRFY), Solid Power, Inc. (NASDAQ:SLDP), and Nio, Inc. (NYSE:NIO), Standard Lithium Ltd (NYSE:SLI) is one of the best EV battery stocks under $10.
