In this article, we discuss the 5 best EV battery stocks to invest in. If you want to read our detailed analysis of these stocks and the outlook for the EV battery market, go directly to the 10 Best EV Battery Stocks To Invest In.
5. Microvast Holdings, Inc. (NASDAQ:MVST)
Number of Hedge Fund Holders: 19
Microvast Holdings, Inc. (NASDAQ:MVST) manufactures fast-charging battery systems from passenger and commercial electric vehicles to heavy-duty trucks and railways. In addition, the Texas-based company produces energy storage systems and battery backup units for data centers.
Microvast Holdings, Inc.’s (NASDAQ:MVST) revenue increased 20% year over year to $36.9 million in the third quarter of 2021, fueled by higher sales of battery products to new and current customers. Microvast Holdings, Inc. (NASDAQ:MVST) reiterated its revenue forecast for the fiscal year ending in December 2021, which is expected to be in the $145 million to $155 million range.
In early November, Microvast Holdings, Inc. (NASDAQ:MVST) expanded its presence in Florida by acquiring a 75,000 square feet facility which will become the company’s battery prototyping headquarters.
At the end of September, 19 hedge funds were long Microvast Holdings, Inc. (NASDAQ:MVST), with a total stake of $185 million, up from 8 in the previous quarter with a stake worth $22.8 million.
4. FREYR Battery (NYSE:FREY)
Number of Hedge Fund Holders: 20
FREYR Battery (NYSE:FREY) is a Norwegian EV company that commercializes environmentally friendly and low-cost battery cells for electric vehicles, buses, marine vessels, and trucks. The company also offers energy storage systems.
In August, the clean battery manufacturer was listed on the New York Stock Exchange, raising an estimated $850 million. In November, FREYR Battery (NYSE:FREY) was given an Overweight rating and a 12-month price target of $18 a share by Morgan Stanley analyst Adam Jonas. According to Jonas, FREYR Battery (NYSE:FREY) is experiencing an increase in end-market demand for EV batteries and is in discussions with an additional 85 prospective customers.
FREYR Battery (NYSE:FREY) has started the construction of its Customer Qualification Plant (CQP) and first battery cell production line in Mo I Rana, Norway. The plant is scheduled to launch in the second half of 2022.
At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $378 million in FREYR Battery (NYSE:FREY), up from 0 in the previous quarter.
Out of all the hedge funds tracked by Insider Monkey, Sylebra Capital Management was the leading shareholder in Q3 2021, with over 12 million shares of FREYR Battery (NYSE:FREY) valued at $123 million.
3. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 25
QuantumScape Corporation (NYSE:QS) is an electric vehicle firm based in California that creates solid-state lithium-metal batteries which extend the range of electric vehicles and make them recharge faster. QuantumScape Corporation (NYSE:QS) is a Volkswagen AG-backed EV startup that went public in 2020.
As the company ended the third quarter with $1.5 billion in liquidity, the QuantumScape Corporation (NYSE:QS) is gaining attention from retail and institutional investors recently. At the end of the September quarter, 25 out of 867 hedge funds tracked by Insider Monkey had stakes in the EV battery company. The total value of these stakes is $197 million. The largest shareholder of QuantumScape Corporation (NYSE:QS) is New York-based investment firm JS Capital, which owns 2.29 million shares worth $56.3 million.
Cowen analyst Gabe Daoud maintained an Outperform rating on QuantumScape Corporation (NYSE:QS) with a price target of $36 on December 8.
During its third-quarter earnings report, the California-based company announced that it had reached an agreement with one of the top ten global automotive OEMs to purchase QuantumScape Corporation’s (NYSE:QS) 10 megawatt-hours of batteries.
QuantumScape Corporation (NYSE:QS) plans to supply prototype battery samples to electric vehicle manufacturers in 2022, test car batteries in 2023, and begin commercial solid-state battery cells production in 2024.
2. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
NIO Inc. (NYSE:NIO) is a Chinese EV manufacturer that was first to offer battery-as-a-service to EV owners. In April, the Shanghai-based company introduced NIO Power Swap Station 2.0, a drive stop where EV owners can get a fresh battery pack installed in about five minutes. By the end of September, the EV manufacturer had deployed a total of 517 battery swap stations across China. NIO Inc. (NYSE:NIO) intends to build 4,000 battery swap stations in China by 2025, with 1,000 of them deployed internationally.
Bo Pei of Tiger Securities is bullish on NIO Inc. (NYSE:NIO), initiating a Buy rating on the EV stock with a price target of $45 on December 8. Pei believes the Chinese electric car manufacturer is best positioned to “ride the global smart” electric vehicle adoption trend in the next ten years.
In the third quarter of 2021, NIO Inc.’s (NYSE:NIO) total revenue grew 116.6% year over year to $1.52 billion. The EV maker was able to increase its gross margin in Q3 2021 to 20.3% from 12.9% in Q3 2020.
Among the 867 elite funds tracked by Insider Monkey, New York-based investment firm D E Shaw is the biggest shareholder of NIO Inc. (NYSE:NIO). As of the end of the September quarter, the fund owned 6.9 million shares of the EV company worth $246 million.
1. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 38
While Albemarle Corporation (NYSE:ALB) doesn’t directly manufacture EV batteries, the North Carolina-based company is one of the biggest lithium suppliers in the world. The company then produces lithium metals used in manufacturing EV batteries. Albemarle Corporation (NYSE:ALB) has operations in Chile, Australia, and the US.
Albemarle Corporation (NYSE:ALB) expanded its production in China in September following the acquisition of a Chinese lithium converter firm, Guangxi Tianyuan New Energy Materials Co., Ltd. The Chinese lithium factory manufactures battery-grade lithium carbonate and lithium hydroxide, with an annual capacity of 25,000 metric tons of lithium carbonate equivalent (LCE).
On November 3, the lithium manufacturer reported third-quarter earnings that exceeded consensus estimates by $65.9 million. Albemarle Corporation’s (NYSE:ALB) revenue in the third quarter was $831 million, an increase of 11% year on year. The company’s revenue from the lithium segment jumped 35% year on year to $359.2 million during the period, owing to increasing demand and higher lithium prices.
On November 19, Berenberg analyst Andres Castanos-Mollor increased his price target for Albemarle Corporation (NYSE:ALB) to $298 from $280 while maintaining a Buy rating on the shares. Meanwhile, 38 hedge funds out of 867 funds tracked by Insider Monkey reported owning stakes in Albemarle Corporation (NYSE:ALB) at the end of the third quarter, up from 28 in the previous quarter.
Here is what Carillon Tower Advisers has to say about Albemarle Corporation (NYSE:ALB) in its Q3 2021 investor letter:
“Albemarle is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The firm’s shares outperformed in the quarter, driven largely by the current robust demand environment for lithium used in the manufacturing of electric vehicle batteries. As the global push towards the reduction of carbon emissions continues to gain steam, Albemarle is well-positioned to benefit from the accelerating adoption of electric vehicles.”
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