We recently published a list of the 8 Best EV Battery Stocks To Buy in Late 2024. 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 late 2024.

Future of Lithium with M&A Activity and Regional Consolidation Trends

While lithium was down for a long time due to oversupply this year, it seems like the market is gaining back some interest in the metal as can be seen in recent M&A activity. The Australian mining giant Rio decided to acquire Arcadium for a healthy premium showing confidence in the future of the lithium market.

Romano Sala Tenna of Katana Asset Management discussed this in a CNBC interview and he sees continued growth opportunities in the Australian M&A market. It is driven by two key factors: it remains cheaper to acquire existing assets than to build new ones, and regulatory hurdles for new projects are increasing, causing delays.

On the global hunt for lithium, Sala Tenna discussed the competition, especially between China and other countries. He explained that China dominates the upstream processing of lithium, controlling the production of both spodumene and brine.

More importantly, China leads in the downstream processing, producing lithium chemicals for batteries, due to its technological edge and economies of scale. He sees Japan and South Korea trying to challenge China’s position but believes China will maintain its dominance.

Finally, Sala Tenna mentioned that more mergers and acquisitions are expected in important lithium-producing areas like Western Australia and South America, as these regions lead in global lithium production.

READ ALSO: 8 Best EV Penny Stocks to Invest in Now and 7 Best Auto Components and Parts Stocks to Buy Right Now.

Innovations in Battery Technology

While lithium batteries with graphite anodes seem to be the most widely used and known ones, innovations are happening to expand the battery industry in the EV market. According to a Markets and Markets report, The Future of Silicon Battery Industry: Innovations and Market Outlook, the silicon battery market is projected to grow significantly, increasing from $55 million in 2023 to $414 million by 2028, with a compound annual growth rate (CAGR) of 49.5%.

The growth is fueled by the adoption of next-generation lithium-ion batteries that use silicon anodes, which offer greater energy storage capacity and longer battery life. Geographically, North America, Europe, and Asia-Pacific are expected to lead the silicon battery market, supported by government policies, advancements in energy storage technology, and the rise of electric mobility.

Additionally, solid-state batteries have the potential to shorten charging times significantly, which could greatly improve consumer satisfaction and boost the demand for EVs. We mentioned this in our article about the best EV stocks for the long term, where we discussed CNBC’s conversation with Mark Fields. Here is an excerpt from the article:

“Fields suggested that automakers need to offer more affordable EVs and expand hybrid offerings while working towards breakthroughs in battery technology, especially solid-state batteries. These batteries could eventually reduce charging times to match the convenience of filling up at a gas station…

…He emphasized that while automakers are working on delivering low-cost EVs, the real game-changer will be the development of solid-state batteries, which could significantly improve charging times and consumer convenience.”

Our Methodology

For this article, we used ETFs and screeners to identify nearly 30 EV battery stocks and narrowed our list to 8 stocks most widely held by institutional investors. The best EV battery stocks to buy in late 2024 are listed in ascending order of their hedge fund sentiment, which was taken from Insider Monkey’s database of 912 hedge funds.

Why are we interested in 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: 32

Albemarle Corporation (NYSE:ALB) is a major American specialty chemicals company that operates in lithium, bromine specialties, and catalysts. It is heavily involved in the global lithium market, especially for EV batteries. The company produces lithium carbonate and lithium hydroxide for battery applications, along with advanced solutions like lithium metal anodes and lithium sulfide to improve energy density and safety.

It is also working to increase its lithium production capacity, aiming to double lithium carbonate output by 2025. It is also developing the Kings Mountain mine in North Carolina to boost the domestic lithium supply. Partnerships with automakers such as Ford and BMW further strengthen its role in the EV sector, with long-term agreements for battery-grade lithium hydroxide.

On October 10, it was reported by TipRanks that DBS analyst Tina Ting Hu reaffirmed a Buy rating on Albemarle (NYSE:ALB) with a price target of $100. Hu’s positive outlook is based on the company’s potential growth in the EV market and energy storage sector, despite a recent drop in net income and sales forecasts.

The analyst highlighted that growth in the EV market, fueled by technological advancements and supportive government policies, is expected to drive higher demand for lithium, which is key to the company’s operations. The analyst also noted that several upcoming projects could lead to a 20% compound annual growth rate in sales volume by 2027. Additionally, the company’s tolling business expansion is expected to improve its ability to meet rising demand in the energy storage market. Hu also sees potential for Albemarle (NYSE:ALB) to improve its margins.

Overall, ALB ranks 2nd on our list of best EV battery stocks to buy in late 2024. While we acknowledge the potential of ALB as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an 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.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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