This is part of a series of posts on the coming disruptions per Industry (and I’ll cover all industries, minutely, over time) and the BSE/NSE stocks that are expected to benefit from it.
Industry: Electric Vehicles ; Sector: Batteries
This post was first uploaded on 20 August 2017
We all know that the world will be running on Electric Vehicles by 2030.
Being in the stock market, we can all sense that electric vehicle car part makers will benefit heavily and considering that India’s first vehicles will roll out by 2020, it makes infinite sense to spot multibaggers in this space.
Typically, the following parts make up an electric vehicle:
- Regenerative Braking
- Drive System
- Of course, tyres and other routine auto parts too.
We’ll do the batteries in this first installment.
About Electric Vehicle Batteries
If electric vehicles are to succeed, the batteries should help the car run longer miles long and be cost-effective.
Such batteries must power the car for a reasonable number of miles. There is already talk about developing Aluminum air batteries that will last 1,000 miles and cost the consumer about INR 3 per mile.
As technology advances, these costs will come down.
But before we experience Aluminum air batteries, we have to work with Lithium Ion batteries.
Lithium ion batteries, the first to get off the block, contain liquids, and this makes make them heavy. Sooner or later these will have to be replaced but we have to make do with them in the present.
On a side note, IBM is working on Lithium Air and other research labs are working on Aluminum air batteries that will use their respective metals as fuel. After a certain number of miles (One Aluminum Air battery lasts 1,000 miles), the batteries will have to be replaced.
So, while picking stocks, let’s focus on 2 prominent materials that will be used to manufacture EV batteries — Lithium (for the immediate future) and Aluminum (for the distant future).
Know that lithium and graphite (for the anodes) are used in Lithium Ion batteries.
Electric Vehicle Battery Stocks that can become Multibaggers
MOIL — supplies manganese which is used to make aluminum, steel and also will be a key ingredient in EV batteries.
HBL Power Systems — makes batteries for the defence and industrial sectors. Has presence in USA, Middle East and Europe. Can easily handle lithium batteries and changes in technology. Everything looks cool about it except for the fact that its price is a bloody laggard.
Hindustan Copper — mines copper and nickel, which are used in batteries
Graphite India — Graphite is used in EV batteries, but this stock has appreciated way too much
Ashok Leyland — will make electric buses and batteries in collaboration with SUN Mobility. Maybe it will take over Sun Mobility and start making batteries
Other quality battery makers like Everready, Amara Raja and Panasonic too will jump in the fray.
Eon Electric, a small company, also makes Lithium Ion batteries along with mobile parts and optic fibre cable stuff. Please study it in depth before making any decision.
Hindalco, Vedanta, National Aluminum stocks have massive potential going forward irrespective of the fact whether Aluminum Batteries are made or not because aluminum is lightweight and will be used to make the car’s body.
HEG should do well too as it is into graphite electrodes (along with power and carbon), but its share price has jumped 3 times in the last 12 months.
Rain Industries, mines carbon which is used in making many electrical accessories for EVs.
Himadri Specialty Chemicals (suggested by Geordie Job Pottas, an independent equity researcher)
You may want to look at this languishing stock that has the potential to vroooom (but I’m unsure of the management) — Orient Abrasives, which is into mining metals for creating aluminum and many components for EVs.
Further Research on EV Batteries
This is my initial research and I will add more companies as and when I come across them. If you folks come across any, feel free to comment or email me.
Finally, do your own research and consult your financial advisor before making any investment. Remember, you are responsible for your financial affairs.