We recently compiled a list of the 12 Most Promising EV Battery Stocks According to Wall Street Analysts. In this article, we are going to take a look at where Sociedad Química y Minera de Chile S.A. (NYSE:SQM) stands against the other EV Battery stocks.
The term “EV battery stocks” describes businesses producing and developing electric vehicle batteries. This includes firms that provide energy storage solutions, supply battery components, and produce EV batteries.
There is a market for reasonably priced electric cars. Investors can look into the companies making EV batteries, the most crucial and expensive components for EVs, to stay ahead of that demand. The need for EV batteries will rise sharply if the manufacturing of electric vehicles rises dramatically during the next ten years.
To satisfy the need for batteries with greater capacity and cheaper costs, major manufacturers are making significant investments. New energy storage solutions being developed by battery technology start-ups, some of which are coming public through mergers with special purpose acquisition companies, have the potential to completely transform the market. EV battery stocks are a great investment option right now.
The EV battery market is booming. As per a research report, the market for electric vehicle batteries was estimated to be worth $59.06 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2032, from $67.78 billion to $111.20 billion. Asia Pacific held the largest regional share of the global EV battery market in 2023, with a valuation of $28.44 billion, and is anticipated to continue to do so for the duration of the forecast period. One of the main factors propelling the region’s market expansion is China’s soaring EV sales. As per the International Energy Agency, China accounted for the largest global sales of electric vehicles in 2023, with 8.4 million units sold.
While the EV battery market is growing, the cost of EV batteries has dropped significantly in recent years, as per S&P Global, mostly due to declining prices for essential components like nickel, cobalt, and lithium. However, over the coming years, prices are anticipated to stabilize. For instance, the price of lithium carbonate dropped from around $70,000 per metric ton to less than $15,000 in 2024, while the price of cobalt dipped from $70,000 per metric ton in 2022 to about $30,000. While the global average price is predicted to increase somewhat in the second part of the decade, S&P Global Mobility forecasts that nickel cobalt manganese (NCM811) cell prices in Europe will decline by more than 7% between 2024 and 2030. This is caused by a strained raw material supply chain and unsustainable low profit margins for certain suppliers. NCM811 cells are currently cheaper in Greater China due to increased local production, while they are more expensive in Europe.
In contrast, the average cost of lithium iron phosphate (LFP) cells in 2024 will be about $60/kWh, which is 20% less than that of NCM cells. Although LFP production is currently dominated by Greater China, Europe is growing its capacity. However, higher production costs in non-Chinese countries will probably result in a medium-term increase in LFP pricing. While NCM811 packs continue to average $103/kWh in the region, LFP packs in Greater China have achieved the goal of cost parity with internal combustion engine vehicles at $100/kWh. The cost of battery metal may increase, but economies of scale and efficiency improvements should keep costs largely constant.
Analysts anticipate lithium prices to stabilize in 2025 as mine closures and robust EV sales in China lessen the global lithium supply glut. China’s state-owned commodity data source Antaike estimates the glut will decrease by half to 80,000 tons of lithium carbonate, while Cameron Hughes of CRU Group stated that 2024 curtailments and possible additional reductions will substantially relieve the surplus. Over 5 million cars have already benefited from China’s improved EV subsidies, which have driven up demand and helped fuel a late-2024 lithium rally. A buyer of cathode materials attested that the price rise was caused by subsidies, and analysts predict that policy assistance will keep prices rising in 2025, strengthening a bullish outlook.
David Merriman, research director at metals research company Project Blue, stated:
“Any improvement in prices is likely to be felt towards the end of 2025 as inventories are used up and buyers return to the spot market.”
A laboratory technician pouring a specialty blend of industrial chemicals into a beaker.
Our Methodology
For this list, we compiled an initial list of 20 EV Battery stocks. Then we selected the 12 stocks that had the highest upside potential as of April 29, 2025. We have only included stocks in our list with an upside potential of 20% or higher. The stocks are ranked in ascending order of the upside potential.
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).
Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Analysts’ Upside Potential as of April 22: 30.84%
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a Chilean commodity producer with major activities in lithium (mainly used in batteries for electric vehicles and energy storage systems). The company uses its caliche ore and premium salt brine reserves to extract these products. It is growing its lithium refining assets in China and working on a hard rock lithium project in Australia. It is among the Most Promising Stocks as its analysts’ upside potential as of April 22 is 30.84%.
Despite declining lithium prices during 2024, Sociedad Química y Minera de Chile S.A. (NYSE:SQM) recorded full-year revenues of about $4.5 billion with a gross profit of almost $1.3 billion. However, its net income was impacted by a one-time $1.1 billion charge related to a tax dispute over its mining operations.
The firm is a major, reasonably priced producer of lithium, iodine, and nitrates used in specialty fertilizers because of its access to excellent mineral reserves. The geologically advantageous lithium and caliche ore resources of Sociedad Química y Minera de Chile S.A. (NYSE:SQM) are its crown jewels. Its low-cost lithium deposit in the Salar de Atacama has the world’s most significant concentration of lithium and benefits from high evaporation rates in the Chilean desert. Morningstar analysts anticipate double-digit yearly growth in global lithium demand, one of the greatest growth profiles among commodities, as the use of electric vehicles rises.
Overall, SQM ranks 11th on our list of the 12 Most Promising EV Battery Stocks According to Wall Street Analysts. While we acknowledge the potential of EV Battery companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SQM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.