How to Retire Rich: Battery Stocks Edition
Batteries play a crucial role in the future of electric vehicles (EVs). Analysts and industry executives unanimously agree that the primary obstacle hindering widespread EV adoption is the battery technology. Specifically, limited driving range and lengthy charging times deter potential buyers. Consequently, retirement battery stocks have emerged as viable investment options.
Moreover, batteries represent the costliest individual component in electric vehicles. Reducing battery prices would significantly decrease the overall cost of EVs, placing them on a more competitive level with traditional gasoline-powered vehicles.
Currently, electric vehicles can carry a price tag twice that of a comparable gas-powered car. Due to these factors, virtually every automaker and EV startup is engaged in a race to develop advanced batteries that address current limitations and propel the technology further into the mainstream. Discover how to retire rich with a focus on battery stocks.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is not only the leader in electric vehicle manufacturing and sales, it is also the global leader when it comes to making the batteries that power its EVs.
The company just celebrated production of its 10 millionth battery cell at its plant in Austin, Texas. That milestone is the envy of the automotive world and one of the main reasons why Tesla has been able to stay out in front in the electric vehicle race. This makes it one of those retirement battery stocks to consider.
Tesla CEO Elon Musk has repeatedly said that developing batteries that offer longer driving range and shorter charging times is key to mass adoption of electric vehicles. He has also said that creating cheaper batteries is essential to lowering the price of EVs and making them more palatable to consumers. To that end, Tesla has just announced plans to develop cheaper, iron-based batteries for its Semi heavy electric trucks, which could lead to reduced prices on more Tesla vehicles in the future.
Quantumscape (QS)
Shares of Quantumscape (NYSE:QS) had a bruising year in 2022, with the share price nearly falling into penny stock territory. However, things are looking up for the company that develops solid state lithium batteries for electric cars that many analysts see as the Holy Grail for the automotive industry’s future.
So far in 2023, QS stock has vaulted 41% higher. While much of last year’s decline has been erased, the stock remains 16% lower than where it was trading at 12 months ago and is about half its 52-week high. This means it’s a great retirement battery stock to add to one’s portfolio.
QS stock has been recovering on growing confidence that the company and its electric vehicle battery technology are moving in the right direction. Quantumscape recently got a big boost of confidence when Japanese auto giant Toyota (NYSE:TM) said that it plans to employ solid state batteries to power its electric vehicle models. Quantumscape, which counts German automotive powerhouse Volkswagen (ETR:VOW3) as an investors, shipped its first prototype in December 2022.
General Motors (GM)
U.S. automotive giant General Motors (NYSE:GM) recently announced that it is partnering with Samsung to build a brand new $3 billion plant in Indiana that will be operational in 2026 and manufacture batteries for the company to use in its electric vehicles. This is just the latest in a series of battery plants that GM is working to bring online to power its EV ambitions. The Detroit automaker already has five battery plants in Indiana and is building others in Ohio, Michigan and Tennessee.
The battery plants are part of General Motors overarching drive to have half of the six million vehicles it sells annually be fully electric by 2030. If all goes according to plan, GM says that electric vehicle sales should help it to double its annual revenue to $280 billion by the start of the next decade. Batteries are essential to General Motors CEO Mary Barra’s plans to position the company as a force to rival market leader Tesla in the electric vehicle space.
On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
