Electric vehicle (EV) demand is expected to remain strong, creating opportunities for investors in the battery sector. Despite some policy uncertainties, with the Trump administration temporarily halting a federal program for EV charging stations, the long-term trend points to continued growth. To find the best battery stocks, investors must conduct thorough research.
While some battery stocks have performed well, the Global X Lithium & Battery Tech ETF (LIT) has been relatively stable. As of February 14, 2025, the ETF was only up 3.8% in 2025, which mirrors the S&P 500’s 4% return. The LIT exchange-traded fund is valuable to battery stock enthusiasts because it invests in the complete lithium cycle. Lithium is an essential element in the production of electric vehicles, most of which use lithium-ion batteries.
Lithium-ion batteries on a production line at a factory, which is representative of the type of battery being discussed in this article.
Although the ETF’s performance has been moderate this year, investors focusing on individual stocks could capitalize on long-term trends. According to the International Energy Agency, the demand for batteries for electric vehicles is projected to increase tenfold within the next decade.
Analysts suggest that investors should consider battery stocks that can capitalize on the growing demand for EVs. These battery stocks could generate significant returns as market opportunities arise.
- Honeywell International Inc. (HON): +18.6% implied upside/downside
- Tesla Inc. (TSLA): -4.3% implied upside/downside
- Enphase Energy Inc. (ENPH): +20.7% implied upside/downside
- Rio Tinto Group (RIO): +29.5% implied upside/downside
- Enovix Corp. (ENVX): +84.3% implied upside/downside
- EnerSys (ENS): +18.3% implied upside/downside
Based on the closing price on February 14 and the consensus 12-month target price from Wall Street analysts on TipRanks.com.
Battery Stock Analysis
Honeywell International Inc. (HON)
Honeywell operates in aviation, automation, performance materials, and technology. The company provides various renewable energy and energy storage solutions. Its cost-effective Battery Energy Storage System facilitates businesses in managing all phases of battery usage and recycling. The technology allows companies to reduce their utility expenses while improving uptime and reliability.
Battery storage was one of the key components that helped Honeywell achieve a 5% year-over-year revenue increase in fiscal 2024. Sales reached $38.5 billion, and earnings per share were $8.71 for the year. Honeywell has consistently rewarded investors with stock buybacks and dividend distributions, offering a dividend yield of 2.2%. Since 2010, Honeywell has raised its dividend 15 times. The current annual dividend is $4.52 per share, representing a 4.6% increase compared to the prior year’s payout. As of February 14, Honeywell shares are down 10.2% year to date, but HON has returned 15% over the last five years and has more than doubled over the past decade.
Tesla Inc. (TSLA)
Tesla has established itself as a leader in the EV industry despite facing challenges in the European and Chinese markets. The company has made electric vehicles mainstream and has outperformed the S&P 500 for several years. The stock is down 11.9% year to date, though it has increased by more than 520% over the past five years. While the stock is expensive, it is positioned to capitalize on advancements in the battery industry and renewable energy.
Tesla has expanded beyond automobiles, and Powerwall is a key project for battery investors. The Powerwall is a compact home battery that stores solar energy, allowing users to maintain power during outages. This product also allows consumers to go off-grid. Powerwall can store energy for later use. If you have excess energy, you can sell it to the grid for extra income. The Powerwall helped Tesla generate $25.7 billion in fourth-quarter revenue. Auto sales still make up most of its total revenue, but energy generation and storage revenue more than doubled year over year to $3.1 billion. Further diversification beyond auto sales can help Tesla maintain its high valuation and generate long-term returns for investors.
Enphase Energy Inc. (ENPH)
Enphase Energy is a global energy technology firm providing solar generation, storage, and energy management solutions. Its IQ EV Charger helps homeowners reduce energy costs through integration with Enphase’s solar and battery systems. The product is available in the U.S. and Canada, and the company recently expanded into Europe. According to Enphase’s February 2025 investor presentation, the U.S. EV market is growing at a 34% compound annual rate, indicating substantial potential for investors.
Enphase has multiple battery products and solutions that have helped the stock outperform the S&P 500 from 2020 to 2022. The stock is approximately 80% down from its all-time high, and remains down 6.9% year to date. However, Enphase’s recent quarter suggests a rebound. The company reported a 26.5% year-over-year revenue increase and nearly tripled its net income in the fourth quarter.
Rio Tinto Group (RIO)
Rio Tinto is a British-Australian mining company that extracts lithium, a critical component for EV batteries. Additionally, the company has mines for iron ore, copper, aluminum, and other minerals and materials. Rio Tinto is experiencing continued growth, with margins exceeding 20% in the latest quarter.
The company recently acquired Arcadium Lithium for $6.7 billion, expanding its market share. Rio Tinto operates in 35 countries with 57,000 employees and has been in business for over 150 years. Rio Tinto is working to accelerate the decarbonization of its assets. The company is at the forefront of the transition to renewable power and aims to operate electric mobile fleets. Rio Tinto and BHP Group Ltd. (BHP) collaborated last year on battery-electric haul truck trials to further this objective.
Enovix Corp. (ENVX)
Enovix is developing lithium-ion batteries and has a high valuation. Investors are monitoring the company because of its impressive revenue growth rates, which could make the stock price more manageable in the future. The company has a $2 billion market cap with $4.3 million in revenue in Q3 2024. This revenue figure has increased by over 2,000% year over year.
Investors should not anticipate this growth rate to continue indefinitely, but if the company maintains triple-digit year-over-year revenue growth for several years, its valuation could be justifiable. This is a speculative investment because the company continues to spend cash. Enovix recently opened a facility in Malaysia and began shipping battery cells to customers. This wider reach will help the company serve more clients, boost revenues, and reduce expenses.
EnerSys (ENS)
EnerSys is one of the few battery producers that has increased in value both year to date and over the past five years. The stock has risen 7.5% year to date with a 1% dividend yield. EnerSys has consistently raised its dividend, including a 6.7% increase last year, which brought the annual dividend from 90 cents per share to 96 cents per share.
EnerSys is a global leader in stored energy solutions for industrial applications, including EV batteries. The EV boom contributed to EnerSys achieving a 5% year-over-year increase in sales in Q3 FY25, reaching $906 million. Meanwhile, adjusted earnings per share jumped 22% year over year, and EnerSys achieved a 12.7% net profit margin.
EnerSys is working on several initiatives to boost its share of the battery industry. For instance, ‘Wi-iQ’ recently became the new standard for all applicable Motive Power products sold in North America. This battery monitoring device provides real-time analytics to optimize energy use, curtail costs, and extend asset life.
