11 Best Battery Stocks To Buy Heading into 2024

In this piece, we will take a look at the 11 best battery stocks to buy heading into 2024.

One of the most important principles when it comes to investing is trying to guess which industries will play essential roles in the future. After all, if a sector becomes indispensable to customers when it comes to its products, then, naturally, sales in the sector will be strong and income will grow provided that the managers running the business (or businesses) have sound heads on their shoulders. And one doesn’t have to look too hard to find examples of such sectors. For instance, one of the best examples of a sector that has grown rapidly over the course of just a couple of decades is consumer technology, and firms such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) have become trillion dollar entities with billions of dollars in annual revenue.

However, while Apple’s era of rapid growth is most likely over, one budding industry that continues to attract investor attention is the electric vehicle industry. There are several reasons why EV companies are among the most popular among retail and institutional investors alike. Firstly, they offer a revolutionary new technology with the potential to upend the current status quote. Additionally, governments of most developed countries plan to phase out internal combustion cars over the next couple of decades, which naturally opens up the market for electric vehicle manufacturers and allows them to scale their operations.

At the heart of the electric vehicle is the battery. Akin to the fuel tank on a conventional car, without the battery, an electric vehicle cannot function. Additionally, each car has multiple batteries, which makes their demand quite voluminous. As a result, it is unsurprising that the battery industry is a sector that is pinned with some of the highest growth rates in the business world. For instance, consider the market for lithium, which is the building block of the modern day battery. Research estimates that the global lithium market will grow at a compounded annual growth rate (CAGR) of 13.1% between 2021 and 2031 to sit at an estimated $135 billion by the end of the forecast period. Concerning lithium batteries, China is projected to be the largest consumer of these products in 2030, with the Asian economic giant estimated to account for 40% of the global lithium battery demand.

The next question to ask in our analysis of the global battery market and the best battery stocks is, which countries produce the most lithium? After all, if the world really is to completely shift towards electric vehicles, then lithium can very well be the next oil, and the countries that have adequate resources or production facilities will play an indispensable role. Well, looking at the demand projections above, it is perhaps unsurprising that China had the greatest share of global lithium ion battery manufacturing capacity in 2021. We took a look at Lithium Battery Production By Country: Top 12 Countries and determined the top three countries in terms of battery manufacturing capacity (surprise, surprise) China, the U.S., and Hungary. In 2021, China accounted for a whopping 79% of global manufacturing capacity while the U.S. and Hungary accounted for 6.2% and 4%, respectively.

However, while China might make the most batteries, it doesn’t produce the most lithium. In fact, based purely on annual lithium production, the country that has the greatest potential to be the next Saudi Arabia is Australia. This is because Australia produced 55,000 tons of lithium in 2021, which is greater than the production of the next four countries that follow it in the list of 12 Countries That Produce The Most Lithium and naturally makes Australia the largest lithium producer in the world.

Finally, while lithium ion batteries are the mainstay of the electric vehicle industry due to their high energy density, they are also highly toxic and can be quite dangerous in the wrong circumstance. One battery technology that can replace lithium ion batteries and provide far greater energy density and performance is solid state batteries. These batteries do not use a liquid electrolyte to conduct electricity, which improves the amount of current that travels between the negative and positive terminals. When it comes to battery technologies, if we only consider the number of patents filed, then Japan is the most advanced country in the world when it comes to battery technologies.

With these details in mind, let’s take a look at some top battery stocks to buy heading into 2024, and some notable names are General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), and Honeywell International Inc. (NASDAQ:HON).

Photo by Kumpan Electric on Unsplash

Our Methodology

To make our list of the best battery stocks to buy, we first made a list of 28 companies that supply lithium, sell batteries, or provide technologies to operate batteries. Out of these, the stocks with the highest number of hedge fund investors in Q2 2023 were picked as the top battery stocks for 2024.

Best Battery Stocks To Buy Heading into 2024

11. Solid Power, Inc. (NASDAQ:SLDP)

Number of Hedge Fund Investors In Q2 2023: 16

Solid Power, Inc. (NASDAQ:SLDP) is an American firm that develops solid state batteries. Owing to the nascent nature of the solid state industry, it should be quite some time before the products can be adopted by the mass market, and perhaps this is why the firm’s shares are rated Hold on average. However, the average share price target of $3.5 does hint at a large upside over the current share price of $1.67.

By the end of this year’s second quarter, 16 out of the 910 hedge funds polled by Insider Monkey had held a stake in Solid Power, Inc. (NASDAQ:SLDP). Out of these, the largest shareholder is Ken Griffin’s Citadel Investment Group as it owns 1.5 million shares that are worth $3.8 million.

Solid Power, Inc. (NASDAQ:SLDP) joins Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and Honeywell International Inc. (NASDAQ:HON) in our list of the best battery stocks to buy.

10. Stem, Inc. (NYSE:STEM)

Number of Hedge Fund Investors In Q2 2023: 17

Stem, Inc. (NYSE:STEM) is a diversified battery firm that sources energy storage systems and then sells it to customers. The firm expanded its software platform for the financial sector in September 2023 through a new platform designed to help energy traders.

As of June 2023, 17 out of the 910 hedge funds tracked by Insider Monkey were the firm’s investors. Jos Shaver’s Electron Capital Partners owns the biggest stake among these which is worth $17.5 million.

9. QuantumScape Corporation (NYSE:QS)

Number of Hedge Fund Investors In Q2 2023: 17

QuantumScape Corporation (NYSE:QS) is another solid state battery company that is currently in the research and development phase. This makes it a stock that is purely a long term play, as the shares can either rise if a major breakthrough takes place or continue to lose their value if QuantumScape Corporation (NYSE:QS) remains quiet.

During Q2 2023, 17 hedge funds among the 910 part of Insider Monkey’s database had bought and owned QuantumScape Corporation (NYSE:QS)’s shares. Philippe Laffont’s Coatue Management is the firm’s largest hedge fund investor through its $24.4 million investment.

8. FREYR Battery (NYSE:FREY)

Number of Hedge Fund Investors In Q2 2023: 18

FREYR Battery (NYSE:FREY) is a European firm based in Luxembourg that makes and sells lithium ion battery cells. Seems like Wall Street is particularly impressed by the firm, as it is the first stock on our list that is rated Strong Buy on average. Additionally, the average share price target of $13.17 for a sizeable upside over the current share price of $3.97.

Insider Monkey took a look at 910 hedge funds for their June quarter of 2023 shareholdings and discovered that 18 were the firm’s investors. FREYR Battery (NYSE:FREY)’s biggest shareholder is Todd J. Kantor’s Encompass Capital Advisors due to its $64.9 million stake that comes via 6.9 million shares.

7. Enovix Corporation (NASDAQ:ENVX)

Number of Hedge Fund Investors In Q2 2023: 20

Enovix Corporation (NASDAQ:ENVX) is a pure play lithium ion battery manufacturer. Just like FREYR, its shares are also rated Strong Buy on average, indicating that Wall Street is quite bullish on the sector. The firm made a big move in September to expand its battery manufacturing capabilities as it bought a Korean battery manufacturing company.

During this year’s second quarter, 20 out of the 910 hedge funds polled by Insider Monkey had held a stake in Enovix Corporation (NASDAQ:ENVX). Peter S. Park’s Park West Asset Management owns the biggest stake among these, which is worth $97.1 million.

6. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)

Number of Hedge Fund Investors In Q2 2023: 24

Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a backend battery company that provides lithium, the primary material in battery fabrication. The firm’s investors were in for some disappointing news in October as Bank of America reduced its share price target to $59 from $69 and downgraded its rating to Underperform from Neutral.

20 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 research had invested in the company. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)’s biggest hedge fund investor in our database is Ken Griffin’s Citadel Investment Group since it owns $118 million worth of shares.

General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), Sociedad Química y Minera de Chile S.A. (NYSE:SQM), and Honeywell International Inc. (NASDAQ:HON) are some top battery stocks with strong hedge fund interest.

5. Sensata Technologies Holding plc (NYSE:ST)

Number of Hedge Fund Investors In Q2 2023: 32

Sensata Technologies Holding plc (NYSE:ST) is an engineering technology company that sells battery management systems that help determine battery charge rates, performance, and other parameters. The firm scored a win in September when it was added to the S&P MidCap 400 stock index, a positive development about its business strength.

During Q2 2023, 32 out of the 910 hedge funds part of Insider Monkey’s database were Sensata Technologies Holding plc (NYSE:ST)’s investors. Robert Joseph Caruso’s Select Equity Group owns the largest stake among these, which is worth $414 million and comes via 9.2 million shares.

4. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Investors In Q2 2023: 41

Albemarle Corporation (NYSE:ALB) is an American company that is one of the most important providers of lithium for battery production on the planet. The firm faced a setback in Australia in October 2023 when its bid to acquire an Australian lithium company for a multi-billion dollar price tag failed after Albemarle Corporation (NYSE:ALB) withdrew the offer.

As of June 2023, 41 out of the 910 hedge funds part tracked by Insider Monkey had held a stake in the firm. Out of these, Albemarle Corporation (NYSE:ALB)’s biggest hedge fund investor is Philippe Laffont’s Coatue Management due to its $154 million investment.

3. Honeywell International Inc. (NASDAQ:HON)

Number of Hedge Fund Investors In Q2 2023: 61

Honeywell International Inc. (NASDAQ:HON) is an American industrial equipment provider that also makes and sells batteries. The firm has beaten analyst EPS estimates in all four of its latest quarters, and the shares are rated Buy on average with an average share price target of $215.76.

By the end of this year’s second quarter, 61 among the 910 hedge funds polled by Insider Monkey had bought and owned Honeywell International Inc. (NASDAQ:HON)’s shares. John Overdeck and David Siegel’s Two Sigma Advisors is the largest shareholder among these through a $406 million investment.

2. General Motors Company (NYSE:GM)

Number of Hedge Fund Investors In Q2 2023: 72

General Motors Company (NYSE:GM) is typically known for its cars. However, the firm has partnered up with Samsung and LG to set up new battery manufacturing plants in the U.S. that are worth billions of dollars. These days, General Motors Company (NYSE:GM) electric vehicle plans are under quite a bit of pressure due to union strikes that have hampered manufacturing output.

During 2023’s June quarter, 72 hedge funds out of the 910 surveyed by Insider Monkey were the car maker’s shareholders. General Motors Company (NYSE:GM)’s biggest investor among these is Natixis Global Asset Management’s Harris Associates as it owns $1.4 billion worth of shares.

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Investors In Q2 2023: 79

Like GM, Tesla, Inc. (NASDAQ:TSLA) is also known mostly for its cars. However, the firm also makes its own batteries to drive down car costs, and it also sells an energy storage system called Powerwall with batteries to help people live off the electric grid. October 2023 proved to be a great month for Tesla, Inc. (NASDAQ:TSLA)’s batteries, as the firm revealed that it has now built the 20 millionth battery cell in its Texas facility.

79 out of the 910 hedge funds surveyed by Insider Monkey for their Q2 2023 shareholdings had held a stake in Tesla, Inc. (NASDAQ:TSLA). Catherine D. Wood’s ARK Investment Management owns the largest stake that is worth $1.2 billion and comes via 4.8 million shares.

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Disclosure: None. 11 Best Battery Stocks To Buy Heading into 2024 is originally published on Insider Monkey.