We recently published a list of 12 Best EV Battery Stocks to Buy in 2025. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other best EV battery stocks to buy in 2025.
EV Magazine highlighted that The Promoting Resilient Supply Chains Act remains critical for strengthening the EV supply chain in the US, with strong implications for domestic and international markets. The legislation addresses the increasing need for a robust and localized EV supply chain in the US, which is of utmost importance as the broader automotive industry witnesses a significant transition towards electrification.
Notably, the act encourages the localization of critical components in the EV supply chain, mainly batteries and microchips.
What’s In Store for EV Battery Prices?
S&P Global highlighted that the EV battery prices declined significantly over the past few years, primarily because of the decline in prices of critical battery metals i.e., lithium, cobalt, and nickel. For example, cobalt price has declined from ~$70,000 per metric ton in 2022 to ~$30,000 in 2024. Similarly, the lithium carbonate price has fallen from a high of ~$70,000 per metric ton to well below $15,000 in 2024. S&P Global believes that battery metal prices are expected to increase over the longer term. However, because of economy of scale and efficiency gains, the manufacturing cost is expected to be lowered. These 2 effects are expected to result in a flat price trend, demonstrating a marked difference with the exponential price reduction over the past decade.
According to Nikhil Bhandari, co-head of Asia-Pacific natural resources and clean energy research at Goldman Sachs, the global average EV battery price is expected to reach US$90 per kilowatt-hour (kWh) in 2025, demonstrating a decline from US$111 per kWh at the end of 2024. The investment bank believes that, by 2026, it might decline to US$82 per kWh. This means the prices will be ~50% lower than US$149 per kWh in 2023, bringing the cost of owning a battery car in line with the petrol cars in the US on an unsubsidized basis.
As per Research Nester, the EV battery market size has been pegged at US$148.34 billion in 2024 and is expected to surpass US$923.08 billion by 2037 end. In 2025, the industry size of EV battery is expected to be at US$166.26 billion. The market’s growth is expected to stem from the increasing need to save oil and gas. This factor has been prompting nations throughout the world to deploy EVs. The introduction of new models in the market is expected to drive the interest of people in EVs, which will in turn drive the demand for batteries. Research Nester also added that advancement in technology is anticipated to bring opportunities for the broader market.
Our Methodology
To list the 12 Best EV Battery Stocks to Buy in 2025, we conducted extensive research and sifted through several online rankings. Next, we chose the stocks that were popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Tesla, Inc. (TSLA) the Best EV Battery Stock to Buy in 2025?
Tesla, Inc. (NASDAQ:TSLA) is involved in the EV battery business throughout multiple areas – from in-house battery production to raw material sourcing, recycling and energy storage solutions. The company’s vertical integration goes over and above manufacturing, and includes R&D, allowing it to maintain a competitive advantage. Its intangible assets and cost advantage are expected to act as key competitive advantages. Tesla, Inc. (NASDAQ:TSLA) is facing constraints in battery production and it continues to actively work to increase total gigawatt hours of battery production in 2025.
The outlook for the company’s battery business is optimistic, courtesy of its focus on innovation, production scaling, and expanding demand for EVs and energy storage solutions. Tesla, Inc. (NASDAQ:TSLA) is expected to see strong growth in battery sales as it powers the dynamic fleet of EVs, including Model 3, Model Y, Cybertruck and Semi. The company’s 4680 battery cell production can act as a critical growth driver for battery growth. These cells are anticipated to reduce production costs and increase vehicle range and charging speed.
In 2024, Tesla, Inc. (NASDAQ:TSLA) made significant investments in infrastructure, which can fuel the next wave of growth. These include vehicle manufacturing capabilities for new models, AI training compute, and energy storage manufacturing capacity. With the acceleration of EV adoption, the company is well-placed to benefit from increased demand, cost improvements, and new revenue lines which are associated with its leadership in battery technology and manufacturing. Tsai Capital, an investment management company, released its Q4 investor letter. Here is what the fund said:
“Tesla, Inc. (NASDAQ:TSLA) (TSLA—Year of First Purchase: 2020) We’ve owned Tesla since February 2020 and initially paid an average of about $41.66 per share5 . Tesla is a leading AI company that has formidable competitive advantages across various sectors, including electric vehicles, software, and energy storage.
Overall, TSLA ranks 1st on our list of best EV battery stocks to buy in 2025. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
