We recently compiled a list of the 10 Best Battery Stocks To Buy Now According to Short Sellers. In this article, we are going to take a look at where EnerSys (NYSE:ENS) stands against the other battery stocks.
Electric vehicles are the latest trend in the automotive market which is revolutionizing the whole industry. According to Grand View Research, the global electric vehicle (EV) market was valued at $1.07 trillion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 33.6% from 2024 to 2030 and reach $8.85 trillion by the end of the forecast.
The growth is driven by government policies, incentives, and advancements in battery technology, which are making EVs more affordable and appealing. The transportation and logistics sectors are increasingly adopting EVs due to their lower emissions and operational costs, with companies like Amazon integrating electric trucks into their fleets.
Similarly, Grand View Research believes that the global EV battery market was valued at $44.69 billion in 2022 and is projected to grow at a CAGR of 21.1% from 2023 to 2030. Strategic collaborations among battery manufacturers, e-mobility providers, and energy suppliers are improving battery durability and lifespan, while the increasing production of EVs in countries like China, Germany, and Japan, along with government investments in EV charging infrastructure, is further accelerating the market. However, fluctuating raw material prices, such as lithium-ion, could impact production costs.
The Growing Importance of Critical Minerals in Energy Transition
According to BP’s Energy Outlook 2024, the transition to a low-carbon energy system will require a substantial increase in the use of critical minerals, such as copper, lithium, and nickel, essential for supporting the infrastructure and assets needed for this transition. According to the report, the rapid expansion of electric vehicles is projected to reach 1.2 billion (current trajectory) to 2.1 billion (goal to reach Net Zero) by 2050, which will significantly increase the demand for batteries and in turn, higher demand for minerals like lithium and nickel.
Copper demand is expected to rise by 75-100% by 2050, mostly due to its use in EVs and the extension of electricity networks. Lithium demand could grow 8 to 14 times by 2050, mainly driven by its use in EV batteries, which will account for about 80% of total lithium demand by 2050. Lastly, nickel demand is projected to increase two to three times by 2050, with most of this growth linked to lithium-ion batteries in EVs.
How Competitive Pricing and Leasing Are Shaping the EV Market
In an interview at CNBC Power Lunch, Erin Keating, Cox Automotives executive analyst, explored the factors shaping the EV market. She noted that Tesla and Chevy initially dominated EV sales, which is why a growing supply of used cars from the former is now available. These used EVs have become more affordable, partly due to tax credits of up to $4,000. This is helping to drive sales in the used EV market and making it a more attractive option for consumers.
However, the lease market is offering deals that compete with used EV prices. According to Keating, while this puts downward pressure on used EV prices, she emphasized the benefit of the situation and said that more leased vehicles today will enter the used market in a few years, which will ensure a steady supply of affordable used EVs in the future.
Keating also addressed the issue of buyer’s remorse, as some people are frustrated with the slower development of EV infrastructure and range anxiety. Despite this, she reassured consumers that the batteries in used EVs are holding up well with minimal degradation.
It means consumers can trust the longevity of these vehicles, and automakers are committed to supporting them. Although some challenges remain, she believes that as infrastructure improves, consumer confidence and adoption of EVs will continue to grow.
Our Methodology
For this article, we used stock screeners and ETFs including Amplify Lithium & Battery Technology ETF and Lithium & Battery Tech ETF to identify companies involved in the EV battery market. We then selected 10 stocks with the smallest short interest and listed them in descending order of their short interest. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite 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).
A close up view of an energy efficient system housed in a specialized cabinet.
EnerSys (NYSE:ENS)
Short Interest as % of Shares Outstanding: 2.40%
Number of Hedge Fund Holders: 30
EnerSys (NYSE:ENS) is a Pennsylvania-based leading company in the battery industry due to its broad range of energy storage solutions designed for various industrial uses. The company operates through four key segments, Energy Systems, Motive Power, Specialty, and New Ventures.
In its Energy Systems segment, the company supplies uninterruptible power systems (UPS) for telecommunications and industrial sites, large-scale energy storage solutions, and integrated power systems for sectors like broadband and renewable energy.
The Motive Power segment caters to power solutions for electric industrial forklifts and automated guided vehicles. Meanwhile, the Specialty segment provides batteries for automotive, satellite, and military vehicle applications.
The New Ventures segment is focused on creating energy storage and management systems to cut demand charges and offer backup power for utilities and electric vehicles. The company has been actively expanding its market reach through key acquisitions. In July, it completed the purchase of Bren-Tronics, which betters its capabilities in defense applications and strengthens its role in the military battery sector. This acquisition supports the company’s effort to diversify its product lineup and enter rapidly growing markets.
Additionally, the company is in the midst of expanding its operations with the construction of a lithium-ion cell gigafactory in Greenville, South Carolina. The company plans to invest $500 million in this new facility. Once operational, it will produce different types of lithium-ion cells for commercial, industrial, and defense uses, and is aiming for an annual production capacity of four-gigawatt hours (GWh).
In August, EnerSys (NYSE:ENS) reported its fiscal Q1 2025 earnings. The non-GAAP EPS was $1.98, which surpassed expectations by $0.03. The company reported revenue of $853 million. David Shaffer, President and CEO, highlighted that the company achieved its earnings goals by maintaining prices and implementing careful cost reductions, while also investing in promising growth opportunities. By keeping prices stable, the company avoided compromising its pricing to attract new business, and its cost reduction measures suggest a well-thought-out plan for managing expenses.
On August 27, Roth MKM analyst Chip Moore initiated coverage of the stock with a Buy rating and a $120 price target. Moore views the company as a key player in the energy transition, well-positioned to address complex and evolving power challenges. The analyst believes that the company’s innovation in response to trends like electrification, automation, and digitization will drive its future growth. It is among our best battery stocks to buy now according to short sellers.
In the second quarter, 30 hedge funds held positions in EnerSys (NYSE:ENS) worth $430.571 million. As of Q2, AQR Capital Management is the most dominant shareholder in the company and has a position worth $94.022 million.
Overall ENS ranks 4th on our list of the best battery stocks to buy. While we acknowledge the potential of ENS 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 ENS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.