In this article, we discuss the 11 best lithium and battery stocks to invest in along with the latest updates around the industry.
The West Auto Industry Faces Uncertainty with Potential Tariffs and Policy Reversals
According to a Reuters report from November 6, automakers are preparing for potential changes under President-elect Donald Trump, including new tariffs on vehicles imported from Mexico and the reversal of pro-electric vehicle policies. Trump has indicated plans to rescind EPA and Transportation Department regulations and may reduce or eliminate EV tax incentives.
Moreover, the Zero Emission Transportation Association expressed a willingness to collaborate with Trump on future EV development. Trump has also warned of tariffs of up to 200% on Mexican vehicles and is considering similar measures for imports from other regions while encouraging foreign automakers to build plants in the US.
Additionally, in October, Reuters reported that the European Union approved additional tariffs on Chinese electric vehicles, ranging from 7.8% to 35.3%, on top of the existing 10% duty, in response to what it calls unfair subsidies by China. These tariffs, effective October 30, aim to address concerns over subsidized raw materials, batteries, and financing, with China opposing the decision and calling for negotiations to prevent further trade tensions.
China has launched its own probes into EU imports, including pork, dairy, and brandy, potentially retaliating against the EU measures. Chinese EVs currently account for 8% of the EU market, a figure expected to grow to 15% by 2025, with their prices typically 20% lower than European counterparts. The investigation has caused division within the EU, with Germany opposing tariffs while France supports them.
Future of Electric Vehicles in the U.S. Amid Political Changes
GlobalData lowered its 2030 U.S. EV market share forecast from 33% to 28%, citing weakened emissions standards and a focus on lower oil prices after the 2024 elections. Bloomberg reported on November 7 that Mark Wakefield of AlixPartners highlighted that $129 billion in EV investments through 2027 and the $7,500 EV tax credit may be at risk. Automakers are expected to cut EV spending, delay new models, and shift production toward hybrids and gasoline vehicles, like Volkswagen’s adaptation at its South Carolina plant. While reversing Biden’s Inflation Reduction Act could prove challenging, changes to fuel economy standards are likely, though their impact may not be felt until later in the decade.
Optimism for Lithium Demand Amid Market Recovery
The lithium market has experienced a huge decline over the past several quarters due to oversupply and lower demand. However, Ana Cabral, Co-Chair & CEO at Sigma Lithium is positive about the future demand for lithium as discussed in a September interview with CNBC. She noted that lithium prices hit a low point in August but have been recovering steadily. The Chinese recovery package, the largest since COVID, has especially boosted the market, as China accounts for more than half of global EV sales.
While the U.S. has seen slower EV adoption compared to China and Europe, with growth in China outpacing the U.S. and Europe, the fundamentals remain strong. As China continues to dominate the EV market, it plays a crucial role in driving demand and lithium prices. Regarding other uses of lithium, Cabral emphasized that EV batteries remain the primary driver, especially as automakers shift away from combustion vehicles, which is expected to create further demand in the coming years.
11 Best Lithium and Battery Stocks To Invest In
Our Methodology
For this article, we used stock screeners to identify around 20 lithium and/or battery stocks and chose the 11 stocks most widely held by institutional investors. The stocks are listed in ascending order of their hedge fund sentiment, as of Q3 2024.
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).
11 Best Lithium and Battery Stocks To Invest In
11. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 10
Lithium Americas Corp. (NYSE:LAC) explores and develops lithium resources in the U.S. and Canada. The company fully owns the Thacker Pass project in northern Nevada and has investments in other exploration sites in both countries.
In Q3 2024, the company highlighted significant progress on its Thacker Pass project. The U.S. Department of Energy (DOE) approved a $2.26 billion loan to Lithium Americas’s subsidiary, Lithium Nevada Corp., to fund the construction of a lithium carbonate manufacturing facility at Thacker Pass in Humboldt County, Nevada. The facility will produce 40,000 tonnes of battery-grade lithium carbonate annually, supporting the U.S. clean transportation sector. The project is expected to generate 1,800 jobs during construction and 360 permanent jobs once operational. It will help reduce reliance on foreign sources of critical materials.
The facility could provide enough lithium for batteries to power 800,000 electric vehicles each year, preventing the consumption of 317 million gallons of gasoline. In a key development, Lithium Americas and General Motors formed a joint venture, with GM contributing $625 million and acquiring a 38% stake in Thacker Pass. This replaced a previous subscription agreement with GM.
After the loan was finalized, B. Riley analyst Matthew Key increased the price target for Lithium Americas (NYSE:LAC) to $5 from $4.50 and maintained a Buy rating as reported by The Fly on November 12. The firm noted that work on the Thacker Pass project is progressing as planned, and Lithium Americas is on track to make a final investment decision by the end of this year.
10. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Number of Hedge Fund Holders: 12
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a global leader in producing lithium, iodine, and specialty plant nutrients, leveraging its exclusive access to mineral-rich reserves in Chile’s Atacama Desert. This position enables the company to support industries like EVs and renewable energy storage.
Operating in over 100 countries, SQM held an 18% share of the global lithium market in 2023, supplying products to 207 customers across 39 nations, with a strong focus on Asia. Its partnership with Kidman Resources in Australia has further expanded its lithium operations. Moreover, a partnership with Chilean state-owned Codelco, lasting until 2060, aims to improve production and adopt advanced extraction technologies.
In Q3, SQM reported solid performance across its business lines in Q3 2024. Specialty Plant Nutrition volumes grew by more than 20%, boosting revenues by 12% year-over-year despite lower prices. Iodine prices showed steady growth due to strong demand and limited supply. In lithium, sales volumes exceeded 51,000 metric tons, an 18% increase from the previous year, though prices declined 24% from the previous quarter due to temporary oversupply.
Analysts are also quite optimistic about the long-term prospects for SQM. On November 25, The Fly reported that Scotiabank lowered its price target for SQM shares from $60 to $50 but still rated it as Outperform. The bank sees SQM as the best long-term option among the lithium companies it covers. However, the price target was reduced due to expectations that lithium prices will stay low for a longer period.
9. Solid Power, Inc. (NASDAQ:SLDP)
Number of Hedge Fund Holders: 12
Solid Power, Inc. (NASDAQ:SLDP) specializes in solid-state battery technology, focusing on applications in electric vehicles and other sectors. The company is known for its sulfide-based solid electrolytes and licenses its innovative cell designs and manufacturing methods. Its technology improves battery safety and boosts energy density by 50-75% compared to traditional batteries. This positions the company as a key player in industries like EVs, electronics, and aerospace.
Solid Power continues to work closely with partners like BMW and SK On, focusing on developing competitive solid-state battery technology for automotive applications. Additionally, the company signed a non-binding Memorandum of Understanding (MoU) with a major battery manufacturer to explore potential collaboration on electrolyte development. It is also strengthening relationships with research institutes in Korea.
Solid Power (NASDAQ:SLDP) management highlighted significant milestones in Q3, including the U.S. Department of Energy (DOE) selecting the company to negotiate a $50 million grant for a project aimed at producing sulfide-based solid electrolyte materials for all-solid-state batteries (ASSBs). This selection is seen as a validation of Solid Power’s technology and business model.
The company is focused on advancing both the performance and manufacturing of its electrolyte products, moving from batch production to a continuous manufacturing process, with the first pilot line planned for installation within the next 12-18 months. By 2026, Solid Power expects to produce 75 metric tons of electrolytes per year, increasing to 140 metric tons by 2028. On the cell side, the company made improvements to its A-2 cell design, aiming for higher performance in safety and energy density, with testing expected in early 2025.
8. Enovix Corporation (NASDAQ:ENVX)
Number of Hedge Fund Holders: 14
Enovix Corporation (NASDAQ:ENVX) focuses on advanced lithium-ion batteries, especially with its 3D Silicon cell design that incorporates a fully active silicon anode to boost energy density and battery life. This positions the company as a leader in sectors like electric vehicles, mobile phones, and IoT devices. In 2023, Enovix expanded by acquiring Routejade, Inc., entering the conventional lithium-ion battery market for applications in wearables and medical devices.
The company generates revenue from battery sales and engineering contracts while working with OEMs globally. With research labs in India and Malaysia, it is also advancing next-generation materials. Additionally, in July 2023, Enovix (NASDAQ:ENVX) signed a non-binding MOU with a major automotive manufacturer to improve its battery design for EVs, focusing on optimizing performance, charging speed, and thermal management through a stacked electrode structure.
For the third quarter, Enovix (NASDAQ:ENVX) reported impressive results with Q3 non-GAAP EPS of -$0.17, surpassing expectations by $0.03. Revenue for the quarter totaled $4.32 million, reflecting a 2060% year-over-year increase, and exceeded estimates by $0.21 million.
7. Sigma Lithium Corporation (NASDAQ:SGML)
Number of Hedge Fund Holders: 16
Sigma Lithium Corporation (NASDAQ:SGML) is a major global lithium producer focused on providing carbon-neutral, sustainable lithium concentrate for electric vehicle batteries. The company operates its Grota do Cirilo facility in Brazil, where it produces Quintuple Zero Green Lithium. This process is distinguished by its commitment to environmental and social sustainability, using zero carbon energy, no potable water, no toxic chemicals, and no tailings dams.
Phase 1 of production began in Q2 2023, and Sigma Lithium has approved a Phase 2 expansion, which will increase its production capacity to 520,000 tonnes of lithium concentrate. In Q3, the company secured BRL 487 million (BRL1 = US$0.17) from Brazil’s Development Bank (BNDES) to fund its second Greentech Carbon Neutral Plant and expand production at Grota do Cirilo. It covers 99% of Phase 2 CapEx, with favorable terms including a 2.5% fixed interest rate and 16-year maturity.
On December 3, Sigma Lithium (NASDAQ:SGML) announced that it is in the process of shipping 27,500 tonnes of its Quintuple Zero Green Lithium from the Port of Vitoria to IRH Global Trading LTD in Abu Dhabi, showing the company’s operational efficiency and ability to meet sales goals. The company achieved a peak production of 900 tonnes per day, reaching an annualized production rate of 270,000 tonnes, a level expected to be maintained. It is focused on expanding production capacity, with plans to reach 100,000 tons of LCE by 2026, backed by new plant construction and further cost optimization efforts.
6. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 20
NIO Inc. (NYSE:NIO), a leading electric vehicle company, focuses on premium smart EVs and is known for its battery swapping technology and Battery as a Service (BaaS) model, which offers flexible battery subscription options. The company also recently launched its mass-market brand ONVO, which started selling vehicles in September 2024. Its vehicles include features like battery swapping and support for various battery ranges.
In 2023, NIO launched a 150 kWh semi-solid-state battery, increasing the driving range of its vehicles to about 930 kilometers (578 miles) per charge, outperforming traditional lithium-ion batteries. As of the third quarter of 2024, the company reported having 2,737 global power swap stations, including 887 on highways, providing over 58 million swaps for NIO and ONVO users. Additionally, more than 24,000 power and destination chargers are operational. The company is expanding internationally, opening its first NIO House in the MENA region and sales and deliveries are underway in the UAE. Next year, NIO aims to accelerate global growth with products from ONVO and Firefly.
As reported by TipRanks on December 3, DBS analyst Rachel Miu views the company’s expansion to increase market reach in a positive light. The analyst maintained a Buy rating on NIO (NYSE:NIO) with an HK$58.00 (HK$1 = US$0.13) price target.
5. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 22
QuantumScape Corporation (NYSE:QS) focuses on developing solid-state lithium-metal battery technology for electric vehicles. Its solid-state batteries aim to address limitations in conventional lithium-ion technology, offering higher energy density, faster charging, and better safety.
The company has partnered with Volkswagen and is also working with other automotive manufacturers to explore opportunities in stationary storage and consumer electronics. The technology is also designed for cost efficiency, potentially offering lower manufacturing costs compared to traditional lithium-ion batteries by eliminating anode host materials.
In Q3, QuantumScape (NYSE:QS) reached an important milestone by producing small batches of its first B Sample cells for the QSE-5 battery, which are now being shipped for testing by automotive customers. The QSE-5 is a solid-state lithium metal battery that does not use an anode. It can charge quickly, from 10% to 80% in just a few minutes, has a high energy density of 844 watt-hours per liter, and performs well in terms of energy density, power, charging speed, low-temperature operation, and safety. This achievement marks the start of making the technology ready for mass production, with ongoing testing, feedback, and improvements planned for the coming months.
QuantumScape (NYSE:QS) also signed a significant agreement with PowerCo, Volkswagen Group’s battery manufacturer, to mass-produce the QSE-5 at gigawatt-hour scale. The agreement includes collaboration on industrialization, with PowerCo contributing skilled personnel and resources, and QuantumScape receiving a $130 million royalty prepayment. The company ended the quarter with $841 million in liquidity, and the PowerCo deal extended its cash runway into 2028.
4. EnerSys (NYSE:ENS)
Number of Hedge Fund Holders: 30
EnerSys (NYSE:ENS) is a global provider of energy storage solutions for industrial applications, offering products such as batteries, chargers, power equipment, and outdoor enclosures. The company operates in four segments: Energy Systems, Motive Power, Specialty, and New Ventures. These segments serve industries including telecommunications, utilities, electric vehicles, aerospace, defense, and medical sectors.
On September 20, EnerSys (NYSE:ENS) announced its selection to negotiate a $199 million grant from the U.S. Department of Energy (DOE) as part of the Bipartisan Infrastructure Law. This funding will support the development of a lithium-ion cell production facility in Greenville, South Carolina. The company is investing $665 million in the gigafactory, which will provide reliable domestic supply and support the company’s shift toward higher-performance lithium products.
The factory will meet Department of Defense requirements and is expected to drive long-term growth and financial returns. The company also outlined its sustainability goals, aiming for Scope 1 neutrality by 2040 and Scope 2 neutrality by 2050. EnerSys (NYSE:ENS) is also collaborating with European battery firm Verkor SAS to enhance its manufacturing expertise and strengthen its U.S. supply chain.
3. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 30
Rio Tinto Group (NYSE:RIO) is a global mining and metals company involved in sectors like copper, aluminum, diamonds, and lithium. It is set to expand its presence in the lithium market with the acquisition of Arcadium Lithium plc. On October 9, Rio Tinto announced an all-cash deal to acquire Arcadium at $5.85 per share, totaling approximately $6.7 billion.
Arcadium Lithium is a fast-growing, vertically integrated producer of lithium chemicals, with an annual production capacity of 75,000 tonnes of lithium carbonate equivalent. The company, which is a major supplier to Tesla, plans to more than double its production capacity by 2028.
In addition to lithium mining, Rio Tinto’s (NYSE:RIO) joint venture with Sumitomo Metal Mining improves Rio’s position in the copper (another essential metal for EVs) and gold sectors, especially with the development of the Winu project. Rio Tinto announced on December 4 that the company has reached a Term Sheet agreement for a joint venture on the Winu copper-gold project in Western Australia with Sumitomo Metal Mining (SMM). SMM will pay $399 million for a 30% stake, with $195 million upfront and $204 million based on milestones. The companies will also explore further collaboration in copper, base metals, and lithium.
The Winu project, discovered by Rio Tinto (NYSE:RIO) in 2017, is seen as a low-risk, long-life copper-gold deposit with potential for expansion. Rio Tinto will continue to manage the project, with a pre-feasibility study for an initial processing capacity of 10 million tonnes per annum set for completion in 2025. Rio Tinto and SMM aim to finalize definitive agreements by mid-2025 and continue collaborating with the Nyangumarta and Martu Traditional Owners.
2. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 35
Albemarle Corporation (NYSE:ALB) specializes in engineered specialty chemicals. Its Energy Storage segment focuses on lithium compounds, technical services, and recycling. The Specialties segment provides bromine-based chemicals, lithium specialties, and cesium products for the chemical and pharmaceutical sectors, as well as zirconium, barium, and titanium products for pyrotechnics.
The Ketjen segment delivers clean fuel technologies, catalysts for refining processes, and performance catalyst solutions. The company serves several industries, including energy storage, petroleum refining, consumer electronics, automotive, construction, and pharmaceuticals.
Albemarle (NYSE:ALB) reported its Q3 2024 results on November 6, and it achieved $1.4 billion in net sales, down 41% year-over-year due to lower lithium pricing. A net loss of $1.1 billion, or $9.45 per diluted share, included an $861 million pretax charge for asset write-offs. Adjusted EBITDA was $211 million, reflecting lower lithium prices but partially offset by reduced costs and higher volumes in energy storage and specialties.
However, the company is implementing a new operating structure targeting $300–$400 million in cost improvements, achieved by reducing redundancies, lowering management layers, and optimizing manufacturing. Workforce reductions of 6%-7% will bring total job cuts this year to nearly 1,000. Albemarle (NYSE:ALB) plans to cut 2025 capital expenditures by 50%, saving over $800 million, while focusing on safety, maintenance, and phased growth.
Moreover, based on the earnings report, RBC Capital raised Albemarle’s (NYSE:ALB) price target from $108 to $133, maintaining an Outperform rating. The firm noted that the company showed strong Q3 results, with significant growth in Energy Storage, improved Specialties earnings, and management holding its $12k-15k per ton lithium outlook despite lower prices due to major cost improvements.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is a leading electric vehicle company with key ventures in batteries and solar technology. It plans to invest $3.6 billion in Nevada to build a factory producing 4680 battery cells, essential for the Cybertruck, which requires around 7 GWh of battery capacity annually.
Additionally, the company is committing $1 billion to establish a lithium refinery in Texas, designed to sustainably produce battery-grade lithium hydroxide. This facility is expected to support 50 GWh of annual output, improving battery supply and reducing costs.
Tesla (NASDAQ:TSLA) CEO Elon Musk seems to have a close relationship with President-Elect Donald Trump which could prove beneficial for the company. Reports suggest that the Trump administration plans to prioritize creating federal regulations for self-driving vehicles. According to a Bloomberg report from November 17, this initiative would focus on easing restrictions through the Department of Transportation, aligning with Tesla’s (NASDAQ:TSLA) investments in autonomous technology. Current regulations limit the production and deployment of fully autonomous cars, but potential federal rule changes could support the company’s goals. Elon Musk has voiced support for nationwide policies enabling self-driving vehicle use.
Moreover, the market is anticipating that the President-Elect is likely to cancel the Inflation Reduction Act (IRA) EV tax credits, which Elon Musk is less worried about. In the company’s Q2 earnings call in July, Colin Langan of Wells Fargo asked Elon Musk about the potential impact on Tesla if the IRA was repealed under a Trump presidency. Langan noted Tesla benefits from EV subsidies and production tax credits for batteries.
Musk acknowledged that while losing IRA support would have some negative effects on Tesla, it would be far more damaging to competitors. Musk said:
“I guess that there would be like some impact, but I think it would be devastating for our competitors. But — and it would hurt Tesla slightly. But long-term probably actually helps Tesla would be my guess. Yes — but I’ve said this before on earnings calls, it — the value of Tesla overwhelmingly is autonomy. These other things are in the noise relative to autonomy. So I recommend anyone who doesn’t believe that Tesla will solve vehicle autonomy should not hold Tesla stock. They should sell their Tesla stock. You should believe Tesla will solve autonomy, you should buy Tesla stock. And all these other questions are in the noise.”
While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) 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 TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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