The automotive industry is going electric. Every major automaker is actively developing or already selling electric vehicles (EVs).
There's a clear demand for electric vehicles at the right price point. Investors who want to get ahead of that demand can do so by looking at the companies producing EV batteries, the most important and costly components of EVs. If electric vehicle production significantly increases over the next decade, the demand for EV batteries will skyrocket similarly.
Top electric vehicle battery stocks to consider
1. Tesla
NASDAQ: TSLA
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Tesla is the largest auto manufacturer by market cap, exclusively building electric vehicles. While it partners with several suppliers for batteries, it's behind the designs. It's also ramping up production of its own batteries but facing challenges with its processes in providing viable cathodes. The company retooled one factory in early 2025 to address production issues.
Tesla has a built-in customer for its battery production if it can successfully ramp up its 4680 battery. It plans unique versions for its Cybertruck, robotaxi, and other electric vehicles.
That said, Tesla's auto sales have been falling as competitors enter the market, especially in Europe. Investors are hoping the introduction of its robotaxi service will be met with strong demand, pushing more Tesla vehicles onto the streets.
2. Toyota Motor
NYSE: TM
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NASDAQ: HON
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You might know the Honeywell (HON +1.80%) name because it designed your home thermostat, but Honeywell does a lot more than make simple air conditioning (AC) systems for single-family homes. It designs safety systems for commercial buildings, avionics systems for commercial airlines and the military, and systems to automate safety and efficiency in various work environments.
Honeywell doesn't design EV batteries itself. Instead, it uses its expertise in safety automation to make them safer. Battery manufacturers can incorporate Honeywell's technology into their battery packs to help prevent fires. Honeywell's systems can detect thermal runaway by sensing off-gassing or particulate matter, providing ample time for a driver to stop the car and seek repairs before a battery fire.
While the battery safety business is only a tiny part of Honeywell, the growing trend toward battery-only vehicles provides an ample runway for growth in the segment.
4. BYD
OTC: BYDDY
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BYD (BYDDY -0.56%) is an integrated EV company based in China, and it's one of the world's most valuable automakers. It manufactures and sells hybrid and battery-powered cars, buses, trucks, and monorails, as well as the batteries, semiconductors, and other components used in its EVs.
BYD's EVs are top sellers in China and Europe. It's the leading global manufacturer of battery electric vehicles and plug-in hybrids by a wide margin, consistently selling more than double the number of its closest competitor. As a fully integrated EV company, its battery business is benefiting from brisk sales.
5. Li Auto
NASDAQ: LI
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Li Auto (LI -0.70%) is a Chinese auto manufacturer specializing in plug-in hybrid EVs, which offer a combustion backup to their battery-powered engine. This allowed it to scale its battery pack production earlier than many competitors, giving it a cost advantage. Li still sources its battery cells from third parties, including China's Contemporary Amperex Technology Limited (CATL), and its cost advantage is eroding as other competitors scale.
Li launched its first battery-only vehicle in 2024. The Mega minivan received a lukewarm reception, as did Li's second pure-electric vehicle, the i8 (a full-size SUV). The company continues to release new vehicles for the battery-only lineup, but finding its market has been difficult.
6. Albemarle
NYSE: ALB
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8. LG Energy Solution
LG Energy Solution is the third-largest EV battery supplier in the world. The Korean company works with global automakers in the U.S., Japan, and Korea.
The company is aggressively expanding its production capacity to benefit from economies of scale in the highly commoditized EV battery industry. Management is targeting 30 GWh of capacity by the end of 2026, up from 17 GWh at the end of 2025.
The company has effectively pivoted as it ramps up capacity, but EV demand declines in the United States. Its Michigan expansion began operations in the summer of 2025. Instead of producing EV batteries, it produced storage cells, which can be used in AI data centers. When EV production picks back up, it can retool its systems to support growth in EV batteries.
In the meantime, it continues to invest in R&D to improve battery technology, focusing on features such as faster charging speeds that could help differentiate its product.
9. QuantumScape
NASDAQ: QS
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NASDAQ: SLDP
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Solid Power (SLDP +3.37%) designs solid-state battery technology. Founded in 2011, it went public in December 2021 via a special purpose acquisition company (SPAC) merger.
Solid Power intends to license its designs or sell its solid electrolyte for use in production at other battery manufacturers. Its technology is also compatible with existing technologies, so its designs can get to market faster.
In 2024, Solid Power won a $50 million award from the U.S. Department of Energy to produce its electrolyte materials for solid-state batteries. The award should help bolster its cash runway, as its minimal revenue from partners began to stall in the latter half of 2024.
In 2026, the company plans to expand its electrolyte production capacity by 150% to 75 metric tons, and by 2028, it could produce 140 metric tons. Since it's backed by Ford and BMW, it should have customers lined up for its batteries if it can execute on its timeline.
BMW has already begun testing vehicles powered by its battery technology in Munich. Still, there's a risk that its technology won't work as well as expected or that competitors will develop a better product in that time.
Benefits and risks of investing in EV battery stocks
The benefits of investing in EV battery stocks include:
- A secular trend. Automakers are increasing their production of electric vehicles as demand continues to rise. Batteries are the most costly component of new EVs.
- Government support. The Inflation Reduction Act introduced incentives for EV battery production in the United States. Recent legislation has tightened requirements for manufacturers to receive those incentives, but they may still encourage new production and innovation in the industry.
- Nearing an inflection point. As EV battery technology improves and production costs decrease, we may be nearing an inflection point at which the cost of owning an electric vehicle falls below that of an internal combustion vehicle for the majority of consumers, accelerating growth.
The risks of investing in EV battery stocks include:
- Execution risk. EV batteries require extensive testing for both safety and quality. If a product doesn't meet an automaker's requirements or a competitor offers a superior product, it could reduce sales and profitability.
- Supply chain risk. The raw materials and components used to manufacture EV batteries come from all over the world. A single hitch in the supply chain could cause delays and increase costs for manufacturing, weighing on profitability.
How to choose EV battery stocks
There are many different ways to invest in EV battery stocks. You can buy manufacturers, suppliers, auto companies, battery pack component producers, or companies that integrate multiple aspects of those businesses.
But a successful investment in an EV battery stock will find a company with a solid financial footing, unique competitive advantages, and a long runway for growth. If you can buy a company with those three characteristics at a fair price, you're very likely to make a successful investment.
How to invest in EV battery stocks
Investing in EV battery stocks is simple. The following steps will walk you through it.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Future outlook for the EV battery industry
Demand for EV batteries is expected to continue rising as manufacturers expand their electric vehicle designs to appeal to a broader set of consumers and meet environmental regulatory requirements.
With raw materials such as lithium, a key component in batteries, demand for the element is set to increase, benefiting miners. Meanwhile, the pressure is on EV battery makers to increase battery density and keep prices low as automakers aim to meet consumer price points.
Overall, the EV battery market is set to grow 22.5% per year through 2030, according to Research and Markets. However, investors shouldn't expect growth to be linear, as demand for EVs has been lumpy in recent years.
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FAQ
EV battery stock FAQ
About the Author
Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Honeywell International and Tesla. The Motley Fool recommends BYD Company, General Motors, and Volkswagen Ag. The Motley Fool has a disclosure policy.
