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 Albemarle Corporation (NYSE:ALB) 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.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Growth Drivers for the EV Battery Market

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).

Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders: 35

Albemarle Corporation (NYSE:ALB) is a critical player in the EV battery industry, mainly through its significant involvement in lithium production and supply. Truist initiated coverage of the company’s shares, providing a “Hold” rating and a price target of $96. As per the firm, Albemarle Corporation (NYSE:ALB)’s scale and relatively low-cost production footprint place it well for the long term to capitalize on growth potential in the broader lithium market.

Elsewhere, Morningstar expects that lithium demand will continue to grow at a double-digit pace each year as a result of increasing global EV sales and the buildout of utility-scale batteries. As supply growth slows, the firm expects demand to outpace supply, resulting in higher prices in 2025. As a low-cost lithium producer, it expects Albemarle Corporation (NYSE:ALB) to get through the pricing downturn and be well-positioned to benefit from higher long-term prices. The company’s strong and durable cost advantage in lithium and bromine production is expected to continue to act as a competitive advantage.

Morningstar further added that Albemarle Corporation (NYSE:ALB) possesses a cost advantage in lithium carbonate production because of its lucrative brine assets in the Salar de Atacama in Chile, which produces lithium at the lowest cost on a global basis, excluding royalties. Morningstar expects lithium prices to rebound and stay well above the marginal cost of production through at least the remainder of the decade. This will lead to excess profits and return on invested capital for Albemarle Corporation (NYSE:ALB).

Overall, ALB ranks 4th on our list of best EV battery stocks to buy in 2025. While we acknowledge the potential of ALB 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 ALB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.