10 Worst-Performing Industries in 2024

4. Batteries/Energy Storage

iShares Energy Storage & Materials ETF (NASDAQ:IBAT): -6.53%

The batteries/energy storage industry has been caught off-guard by a growth slowdown in the EV industry after rapid growth, resulting in oversupply issues in the battery industry. The Energy Storage & Materials ETF (NASDAQ:IBAT) being down 6.53% year-to-date is indicative of the situation in the industry.

BloombergNEF notes that sales of Electric Vehicles (EVs) and Plug-In Hybrid Vehicles (PHVs) grew by over 100% in 2021, 62% in 2022, and 31% in 2023.

This, combined with upstream expansion and destocking by cathode producers, resulted in sluggish demand for batteries in 2023. These pressures were combined with upstream expansion, destocking by cathode producers, and broader commodity prices’ decline as well.

The global investment in battery technology is expected to post a decline this year for the first time since 2020, according to Rystad Energy Research. Capital inflow in the industry in 2024 is being deterred by weak market sentiment due to a momentum drop in EV sales, and oversupply, resulting in low prices causing downward pressure in margins.