Solid-State Battery Stocks to Charge Up Your Portfolio
When it comes to electric vehicles, solid-state battery stocks are expected to be the next major breakthrough. Solid-state batteries use solid electrolytes. Whereas current lithium-ion batteries use a liquid polymer or gel.
There are a number of advantages to this type of battery chemistry. The biggest of which are higher energy density, faster charge times and reduced fire risk. Higher energy density may further ease the range anxiety that has surrounded EVs. The same can be said for faster charge times.
That is not to say there aren’t challenges associated with solid-state batteries. Scaling up production is difficult, and that is one reason we haven’t seen them used in large numbers yet. For instance, Toyota plans to introduce solid-state-powered vehicles in 2025. Plus, the cost of these batteries remains high, with current estimates as high as $800/kWh. Li-ion batteries need to hit about $100/kWh for costs to be comparable to internal combustion vehicles.
Thus, investing in solid-state batteries now is a bet on the future. If that future becomes a reality, these batteries have the potential to revolutionize an industry that is already revolutionary.
Here are the best solid-state battery stocks to invest in today:
- QuantumScape (NYSE: QS)
- Samsung (KRX: SSNLF)
- Toyota Motor Corporation (NYSE: TM)
- Panasonic (OTC: PCRFY)
Best Solid-state Battery Stocks
Now that we’ve laid out which are the best solid-state battery stocks, let’s take a closer look.
QuantumScape (QS) is one of the leading solid-state battery tech stocks today. The company is currently developing lithium-metal cells capable of retaining more than 90 percent of their life over 1,000 charge cycles. With the higher density of solid-state batteries, that could mean just a 10 percent loss of life after roughly 500,000 miles. Further affirming the legitimacy of its technology, QuantumScape has received a $300 million investment from Volkswagen and was backed by Bill Gates in its IPO.
QuantumScape was founded in 2010 and is based in San Jose, California. It went public in late 2020 and currently has a market cap of $12.8 billion. Currently, its stock has an earnings-per-share (EPS) of -3.85 with no earnings posted yet. Unsurprisingly, its share price has remained mostly flat after an initial IPO spike. This isn’t surprising as its batteries won’t appear in production vehicles until 2024 at the earliest. Still, its battery tech is impressive and it has the data to back up its statements.
You probably think of Samsung (SSNLF) as a phone and TV manufacturer and less about batteries. Still, batteries are central to making some of those devices work. And Samsung has gotten onboard the solid-state EV battery train. In its March 2020 announcement, Samsung said it was able to increase battery energy density to 900Wh/L. Thus, allowing its prototype to be 50 percent smaller than conventional lithium-ion batteries. That includes an 800-km (497-mile) range and more than 1,000 charge cycles.
Because SSNLF trades over-the-counter, data for the stock is not as robust as other stocks. However, this is a huge company with a market cap of over $422 trillion. It also has a forward dividend yield of 2.66 with an EPS of 4.33. Its revenue for Q3 2021 was $73.98 trillion (about $61.9 billion) compared to $63.67 trillion last year. Its net profit margin was 12 percent compared to 9.6 percent last year.
Keep reading for more information on solid-state battery stocks.
There have been many headlines showing that Toyota (TM) doesn’t seem too keen on EVs. And yet, Toyota owns by far the most solid-state battery patents of any company as of 2018. In fact, it has over five times as many solid-state patents as Samsung, the next-largest holder. Hence, Toyota has big intentions for solid-state batteries. In fact, Toyota’s solid-state batteries may be able to go from empty to full in as little as 10 minutes.
Of course, Toyota is another solid-state battery stocks company whose business model is more than just batteries. As such, its market cap is nearly $250 billion. Its stock has a favorable 5.60 P/E ratio and an EPS of 32.08. Plus, it has a forward dividend yield of 4.46. Its share price has increased more than 50 percent during the pandemic. This strong trend is likely to continue.
Panasonic (PCRFY) is another multinational conglomerate that produces everything from cameras to beard trimmers. However, Panasonic is also a big supplier of electric vehicle batteries. Early in Tesla’s history, Panasonic was its sole battery supplier. Although Panasonic recently sold its stake in Tesla, its battery-producing aspirations are far from dead. Indeed, Panasonic is hard at work developing new solid-state battery technology. This will lead to higher performance all-solid-state batteries.
Panasonic currently has a market cap of over $26 billion. Its stock has a P/E ratio of 11.36 with an even 1 EPS. Its share price was at one point more than double its pandemic low; now, it is a little less than that. Forecasts expect the stock to continue to rise, making it a great addition to your list of solid-state battery stocks to invest in. Its Q3 earnings report shows revenue of ¥1.74 trillion (about $15 billion), up 4.43 percent from last year. More impressively, net income and net profit margin were up 30 percent and 25 percent, respectively.
Are Solid-state Battery Stocks a Good Investment?
Solid-state batteries have the potential to revolutionize the electric vehicle industry. The benefits of these batteries include higher energy density, longer life and faster charging and reduced fire risk. As a result, several automakers and engineering firms are engaging in the research and development of solid-state batteries.
Still, we likely won’t see these vehicles on the road until at least 2025. In addition, manufacturing is difficult, and the cost per kilowatt-hour (kWh) remains high. Thus, an investment in solid-state battery stocks right now is a bet on the future. It would be a vote of confidence that solid-state batteries will revolutionize the industry as promised.
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About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.