The automotive industry is going electric. Every major automaker is actively developing or already selling electric vehicles (EVs).
Tesla (TSLA -4.20%) is the industry pioneer. Rivian (RIVN -0.31%) shipped its first truck in 2021 and is ramping up production as quickly as it can. And Ford (F +2.45%), General Motors (GM -1.17%), Volkswagen (VWAGY -0.57%), Mercedes-Benz (DAI +1.67%), and other carmakers have been working to make EVs profitable.
One of the biggest challenges for automakers in the shift to EVs is profitability. Both Ford and GM cut back on production in 2024 since they couldn't get their prices down far enough to stimulate more demand. One of the biggest costs for EVs is the battery, and Ford said it's pushing back the production of its F-150 Lightning to 2027 to take advantage of lower-cost battery technology.
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.
Nine best electric vehicle battery stocks in 2026
These are the top EV battery stocks for investors to consider:
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Tesla (NASDAQ:TSLA) | $1.4 trillion | 0.00% | Automobiles |
| Toyota Motor (NYSE:TM) | $280.6 billion | 2.94% | Automobiles |
| Honeywell International (NASDAQ:HON) | $130.1 billion | 2.14% | Industrial Conglomerates |
| BYD (OTC:BYDD.F) | $115.4 billion | 4.38% | Automobiles |
| Li Auto (NASDAQ:LI) | $14.1 billion | 0.00% | Automobiles |
| Albemarle (NYSE:ALB) | $18.6 billion | 1.02% | Chemicals |
| Panasonic (OTC:PCRF.F) | $31.1 billion | 2.42% | Household Durables |
| QuantumScape (NASDAQ:QS) | $6.8 billion | 0.00% | Auto Components |
| Solid Power (NASDAQ:SLDP) | $974.2 million | 0.00% | Auto Components |
1. Tesla
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 in an effort to fix issues with production.
NASDAQ: TSLA
Key Data Points
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 auto sales have been falling as competition enters 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
Toyota (TM -1.64%) is already one of the world's leading car manufacturers, but it trails the competition when it comes to electric vehicles. The Japanese company's plan to catch up involves in-house battery manufacturing and technology development.
NYSE: TM
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NASDAQ: HON
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Honeywell doesn't design EV batteries itself. Instead, it uses its expertise in safety automation to make them safer. Battery manufacturers can include Honeywell's technology in their battery packs to 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
BYD (BYDDY +1.12%) 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.
OTC: BYDDY
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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 the brisk sales pace.
5. Li Auto
Li Auto (LI -2.13%) 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.
NASDAQ: LI
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Li launched its first battery-only vehicle in 2024. The Mega minivan was met with a lukewarm reception, as was Li's second pure-battery 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
Albemarle (ALB +8.23%) is one of the world's top lithium producers -- a key ingredient in most EV batteries. The mining and base materials company has narrowed its focus on lithium in recent years.
NYSE: ALB
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Lithium prices are cyclical, which can lead to periods of strong revenue and profit growth and periods of cutting back on spending. Amid low lithium prices in 2024, Albemarle had to cut back on overhead and its capital expenditures to account for the market weakness. The moves will put the business on much better financial footing while enabling it to ramp back up when prices climb again.
Given the expected boom in EV sales over the next decade, Albemarle could have plenty of tailwinds to keep its overall trajectory headed higher for years to come. The company has assets in Chile and Australia that can produce lithium more cheaply than competitors, allowing it to remain profitable in tough times and competitive when prices rise.
7. Panasonic
Japanese conglomerate Panasonic is a large producer of EV batteries and has been a partner and supplier of Tesla for many years. The two companies first entered into a supply agreement in 2009. Although Panasonic is no longer Tesla's exclusive battery supplier, the company continues to produce a high volume of batteries for the EV carmaker via its gigafactory joint venture.
OTC: PCRF.F
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The battery maker remains well positioned to supply EV batteries to all the major automakers that have unveiled grand plans to produce EVs. While Panasonic isn't a pure-play EV battery company, it's likely to remain a leader in the sector.
8. QuantumScape
QuantumScape (NYSE:QS) is developing solid-state battery technology to increase the range of EVs and enable them to recharge more quickly. The U.S. company is just beginning to test its battery technology at scale. It plans to start producing more than 200,000 batteries annually, although it currently doesn't generate any revenue.
NASDAQ: QS
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QuantumScape is spending heavily to bring its technology to market. The company delivered its first prototype battery samples to EV automakers in 2022. Testing has gone well, with its auto manufacturing partners impressed with the performance. It has since signed three major commercial deals, one with Volkswagen, one with PowerCo, and one with another unnamed auto manufacturer.
Although QuantumScape believes its balance sheet is strong enough to cover several more years of development and testing, investing in the company is risky. It's pre-revenue, and management doesn't expect to generate meaningful commercial sales until 2026.
Ultimately, if its technology fails or is a commercial flop, QuantumScape's stock could become worthless. Still, this is a promising EV battery company with immense growth potential if its research and development (R&D) efforts come to fruition.
9. Solid Power
Solid Power (SLDP -0.78%) designs solid-state battery technology. Founded in 2011, it went public in December 2021 via a special purpose acquisition company (SPAC) merger.
NASDAQ: SLDP
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Unlike other solid-state battery competitors, such as QuantumScape, Solid Power intends to license its designs or sell its solid electrolyte for use in production at other battery manufacturers. Moreover, its technology is compatible with existing technologies, meaning 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 started stalling in the latter half of 2024.
By 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 started testing vehicles using 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 where the cost of owning an electric vehicle falls below that of internal combustion vehicles for the majority of consumers. That could lead to an acceleration in 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 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.
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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
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