We all know that the world will be running on Electric Vehicles by 2030.
Since you want to reap long term benefit, considering 15–25 yrs, let's take a look…
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:
Body Battery Regenerative Braking Drive System Microcontroller Of course, tyres and other routine auto parts too.
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 may become Multibaggers in long term .
*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
too look good.
One may make a good SIP basket-ing any of the above stock with appreciated balance sheet and returns!
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