7 EV Battery Stocks for Green Tech Investors

Electric vehicles are basically cool-looking batteries with wheels. The EV revolution wouldn’t be possible without the advances made in lithium battery technologies – but there’s still a long way to go. Take the Tesla Model 3, the most affordable model in the company’s lineup. The battery packs weigh in around 1,000 pounds and cost somewhere in the neighborhood of $14,000 – about a third of the price of the entire vehicle based on 100-kilowatt hour (kWh) batteries at $142 per kWh

The big brains who calculate such things tell us that batteries need to hit about $100 per kWh to reach price parity with the internal combustion engine. It’s only a matter of time, considering costs have dropped nearly 90% over the last decade, from $1,200/kWh in 2010 to $132/kWh in 2021. In fact, the MBAs at BloombergNEF predict average battery pack prices should be below $100/kWh by 2024. Of course, there are the usual caveats with these projections, especially given the supply chain woes from the Rona. The near-term forecast calls for a slight uptick in per kWh costs due to rises in raw materials.

EV battery cost as a percentage of electric vehicle cost.
Credit: BloombergNEF

Many of our readers are keen on the green EV investment thesis, so we’ve hit this theme from all angles while still warning investors about all the potholes ahead. The boom-and-bust of special purpose acquisition companies (SPACs) over the last couple of years mean retail investors suddenly have plenty of options but few good choices for pick-and-shovel plays on electric vehicles. Most recently, we ran down a list of EV charging stocks. In this article, we’ll try to catch up to the current state of EV battery stocks, many of which have finally emerged from their SPAC cocoons with SEC filings (only SES has yet to complete their SPAC merger). 

Company NameMarket Cap
(USD millions)
Share PriceLoss/Gain Since SPAC
QuantumScape (QS) $6,092 $14.42 +44%
Microvast Holdings (MVST)$1,545 $5.14 -49%
Li-Cycle Holdings (LICY)$1,149 $7.04 -30%
Solid Power (SLDP)$1,002 $5.98 -40%
FREYR (FREY)$952 $8.18 -18%
SES (IVAN)$299 $8.68 -13%
Romeo Power (RMO)$252 $1.88 -81%

An EV Battery Stock with Real Revenue

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A company a subscriber brought to our attention recently is actually pulling in more revenue than all of the other EV battery manufacturers on this list combined. Founded in 2006 and nominally headquartered in Houston, Microvast (MVST) develops and manufactures EV battery technology for commercial vehicles. The company completed its SPAC merger last July and has subsequently lost more than half of its value since then. Revenue through the first nine months of 2021 hit about $85 million, and Microvast appears on pace to beat last year’s revenue of $107.5 million. However, it will likely fall well below the $174 million in 2018 revenue, and our overworked MBAs will need to investigate further to understand the dramatic swings in revenue.

Annual revenues for Microvast.
What happened in 2019? Credit: Yahoo Finance

In about 15 years of operation, Microvast has managed to integrate its various battery technologies into almost 30,000 EVs, running in 160 cities across 19 countries. So there is geographic diversification of revenues, though 87% is currently coming from China and the rest of the Asia Pacific region, with the remainder based in Europe. Big plans are in the works to expand operations in both Europe and the United States. Microvast pocketed $822 million from its SPAC merger with apparently no significant debt, so that’s quite the war chest to expand its manufacturing capabilities.

Using its current market cap of $1.5 billion and annualized revenues of $148 million (based on $37 million from Q3 results), our simple valuation ratio (market cap/annualized revenues) is 10. That’s well below our threshold of 40, but we would want to do more due diligence on this company before we decide to stake a position, especially since our Disruptive Tech Portfolio is already heavy on green technology.

An EV Battery Stock for Elves

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We’re less keen at the moment on a Norwegian company, FREYR (FREY), which also completed its SPAC merger last July. Founded in 2018, the company seemed to mostly subsist off of government grants before it hit the SPAC jackpot with more than $700 million in gross proceeds to fund its first manufacturing facility somewhere just south of the Arctic Circle. The company has yet to commercialize the battery technology that it is actually licensing from a Boston area startup called 24M that has developed a semi-solid battery we keep running into over the years. Despite the fact that FREYR has zero revenue and plans to build its gigafactory close to Santa Claus (elves do work for free, after all), the company has managed to only lose about a fifth of its value since sealing the deal.

The State of Solid-State EV Battery Stocks

Lithium-ion batteries are the default energy storage option for EVs today, but plenty of companies are working on new designs and chemistries to boost energy density and safety, while dropping costs and the time required to charge. One of the leading contenders is the solid-state battery, which replaces liquid chemicals with “solid” materials.

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Probably the company that has generated the most buzz among EV charging SPAC stocks is Silicon Valley-based QuantumScape (QS), partly for some of the names attached to its list of investors. Chief among them is Volkswagen, which has invested at least $300 million and has a 19% stake in the company. QS and VW also formed a joint venture to establish a manufacturing facility to produce the pilot line of QuantumScape’s solid-state lithium battery. Another notable name attached to the company is Breakthrough Energy Ventures, the billionaire club trying to save the planet. Names don’t wow us; fast-growing revenues and solid business plans do. QS is still pre-revenue and the current business is mostly predicated on its relationship with Volkswagen. 

Battery technology from QuantumScape.
Credit: QuantumScape

The stock benefited from being one of the earliest on the SPAC crazy train, trading well above the $10 per share baseline before the merger was completed in November 2020. The stock has been on a steady decline ever since we briefly profiled it more than a year ago but, amazingly is still more than 40% above the SPAC default price, despite the fact that commercialization won’t begin until between 2024 and 2025. We’ll probably be drinking camel milk fermented from microbes if and when QS starts generating significant revenues.

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Another company with a long time horizon that is developing solid-state battery technology for EVs is Solid Power (SLDP), a company we recently profiled as a pure play on a solid-state EV battery. It premiered on the Nasdaq just last month and has already lost about half of its value in little more than a month. In theory, Solid Power has a shorter pathway to start generating revenues by licensing its cell designs and manufacturing know-how to third-party commercialization partners. The company is also banking on selling its proprietary battery materials, especially to its partners, BMW and Ford. Currently, revenues are about $2 to $3 million annually.

Battery costs of Solid Power technology.
The race to beat $100/kWh. Credit: Solid Power

While retail investors may be tempted to invest in QuantumScape or Solid Power based on the marquee names attached to their operations, keep in mind these sorts of deals fall apart all the time. In addition, these major automakers usually hedge their bets with other partnerships and deals.

An EV Battery Recycling Play

That’s certainly the case for EV battery recycling, which involves recovering the increasingly expensive materials that go into their manufacture. Volkswagen, for example, has invested heavily in a sustainable battery startup out of Sweden called Northvolt in which it has a 20% stake. BMW is also an investor in the company, which is valued at $9 billion after raising $6 billion. Another leading EV battery company is Redwood Materials in Nevada with at least $792 million in funding, with Ford being a conspicuous name among the investors. 

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Both of these companies are competing in the same space as Li-Cycle (LICY), another former SPAC trying to stay afloat in the turbulent waters of the public markets. We profiled the company back in October as a risky play on lithium battery recycling, even though we believe in the long-term potential of this kind of pick and shovel play on EVs. The upside is that EV sales are soaring – up 80% in 2021 to 5.6 million units – as raw resources become more expensive and scarce. Also, some of the first EV batteries should soon be hitting the recycling bin (though Li-Cycle and its competitors are working on more than just EVs). Li-Cycle just issued its full 2021 results, with revenues increasing about 830% to $7.4 million compared to a year ago. However, that’s still well below (surprise!) the company’s original estimate of $12 million.

Options for battery recycling
Options for battery recycling. Credit: Li-Cycle

In this case, our simple valuation ratio tells us Li-Cycle is still way overvalued at its current market cap of just more than $1 billion, with shares trading closer to $7 than $6 as of the end of January. Our Maginot Line is 40; Li-Cycle is trading closer to 150.

Romeo, Romeo, Wherefore Art Thou?

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It was questionable whether we would be able to cover Los Angeles-based Romeo Power (RMO) before its stock completely collapsed. At the time, the seven-year-old company had raised about $122 million before completing its SPAC merger in December 2020. A year and some change later, it has lost more than 90% of its value, with a market cap of around $250 million. Its biggest investor, BorgWarner (BWA), is an automotive supplier with a $10 billion market cap looking to add to its own electrification product portfolio that includes things like electric motors. In 2019, BorgWarner entered into a joint venture with Romeo Power to commercialize the latter’s battery management systems, modules, and packs for medium- and heavy-duty commercial vehicles. BWA also took a 20% stake in RMO at the same time. To our earlier point about the transience of these sorts of deals: In October 2021, Romeo Power announced that BorgWarner would pull out of the joint venture, forcing RMO to buy out its partner’s 60% stake.

Romeo Power module.
Credit: Romeo Power

There’s no sign of the flashy investor deck on the Romeo Power website, so we’re not sure what kind of hockey stick growth the company originally promised. Its Q3 results ending on September 30, 2021 represented the company’s first significant revenues of $5.8 million, a 753% increase over the prior year. Don’t get too excited: 68% of that money came from just one customer, with a second customer accounting for another 10%. Almost all of the revenue (83%) came from engineering services associated with the joint venture that is no longer a joint venture. Even Juliet would dump this Romeo. 

Another EV Battery SPAC Stock Charging Up

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Einstein once said that insanity is doing the same thing over and over and expecting a different result. So we present SES, a 2012 spin out from MIT that announced in July 2021 it would merge with Ivanhoe Capital Acquisition Corp (IVAN). Not sure what’s taking so long, but we wouldn’t be surprised if some of the $476 million in gross proceeds from the deal disappear as some investors get cold feet – an increasingly common occurrence as the enthusiasm around SPACs continues to wane. The startup has raised about $325 million to date, with strong ties to Asia and China, in particular, including the country’s biggest automaker Geely and Chinese state-owned SAIC. Hyundai and GM are also investors, along with Foxconn and LG Chem, which is one of the biggest manufacturers of lithium-ion batteries.

SES hybrid battery technology
Credit: SES

SES is developing what it calls a hybrid solid-state battery that is more energy dense than current lithium-ion batteries but more scalable than those being developed by companies like QS and SLDP. It also claims to use artificial intelligence to manage safety features and improve battery efficiency. The company touts its various agreements, such as joint development deals with Hyundai, Kia, and GM – but we know what those are worth. SES is pre-revenue and doesn’t expect to see money rolling in until 2024. If this deal ever closes, SES will be the ticker name with a value of about $3.4 billion.


We limited this article to companies mainly focused on electric vehicles, and we don’t really see any viable pure-play EV battery stocks except for maybe Microvast. One problem is that there are plenty of companies like LG Chem that are already supplying EV batteries, but most are large conglomerates manufacturing lots of other products aside from energy storage solutions. For example, most readers are probably familiar with consumer electronics giant Panasonic. The Japanese conglomerate is one of the largest EV battery suppliers to Tesla and just announced it would spend $700 million to ramp up production of a new lithium-ion battery that would boost EV range by about 15%. Tesla is first in line to receive shipments as early as 2023. LG Chem itself announced last year it would invest $4.5 billion to expand EV battery production in the United States. It’s hard to compete against that kind of money.

While an EV battery stock pure play seems ill-advised at this time, there is one good energy storage stock with multiple exposures to other tech themes that we do like. Nanalyze subscribers can find it in our Nanalyze Disruptive Technology Portfolio.

Want to know what 30 tech stocks we own right now? Want to know which ones we think are too risky to hold? Become a Nanalyze Premium member and find out today!

2 thoughts on “7 EV Battery Stocks for Green Tech Investors
    1. We covered them back in 2015. While they started to show some signs of revenue life, it’s still far from meaningful. The last two quarters it appears to have dropped off too.

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