2 Electric Vehicle Battery Stocks To Buy, 2 To Avoid

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Last week, President Biden signed an executive order setting a target for zero-emissions vehicles to represent at least half of all cars sold in the United States by 2030. The executive order is aligned with the country’s goal of phasing out internal combustion vehicles by 2050.

Rising concerns about climate change, government incentives, and the long-term cost-saving benefits of electric vehicles (EVs) should propel the industry’s growth. As a result, the EV battery market is expected to grow significantly. According to a Fortune Business Insights report, the global EV battery market is projected to grow at a 6.6% CAGR over the next six years to $82.20 billion by 2027. Given this backdrop, fundamentally sound EV battery stocks Panasonic Corporation (PCRFY) and EnerSys (ENS) should witness substantial growth.

However, production and supply bottlenecks have caused some companies in this space to suffer declining financials. For example, the growth prospects of QuantumScape Corporation (QS) and CBAK Energy Technology, Inc. (CBAT) look bleak. These companies are also dealing with several class-action lawsuits. So, we think their stocks are best avoided now.

Stocks to Buy:

Panasonic Corporation (PCRFY)

Headquartered in Kadoma, Japan, PCRFY manufactures and sells various electronic products through five segments: Appliances; Life Solutions; Connected Solutions; Automotive; and Industrial Solutions. Its main product offerings include automotive-use batteries, refrigerators, and industrial motors and sensors.

PCRFY’s sales increased 28.8% year-over-year to ¥1.79 trillion ($16.21 billion) in the fiscal first quarter, ended June 30. Its operating profit rose 2,647.4% from the same period last year to ¥104.40 billion ($950 million ). Net income grew 1,276.8% from the year-ago value to ¥81.20 billion ($720 million). Its EPS grew 878.9% year-over-year to ¥32.79 ($0.30).

On June 10, PCRFY’s North American subsidiary Panasonic Energy and Schlumberger New Energy (SLB) partnered to develop a new, improved battery-grade-lithium production process. As the demand for EVs rises worldwide, this partnership should allow PCRFY to become a major lithium supplier.

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