Battery prices have fallen, but Goldman Sachs still sees promise in the sector, citing four market-leading stocks it is overinvesting in. The investment bank’s analysts said global average battery prices could fall to around $80 per kilowatt-hour by 2026 from $110 per kilowatt-hour this year, in a Sept. 4 equity research note. At that level, “battery electric vehicles could reach cost-of-ownership parity with gasoline vehicles without subsidies, which in turn supports our structural bullish view on battery demand growth,” they wrote. Their comments come as leading battery makers continue to launch new products with higher energy density and lower costs. “We expect the leaders’ massive R&D and capital expenditures to create a virtuous cycle that fuels their product development, which in turn boosts their market share,” the analysts wrote. Looking ahead, they expect the battery industry to “remain consolidated,” with the top five producers — CATL, LG Energy Solution, BYD, Panasonic and Samsung SDI — accounting for about 65% of the global market between 2024 and 2030. CATL Goldman has a buy rating on Chinese battery maker Contemporary Amperex Technology Co., or CATL. The company — with a 40% global market share — “is the world’s largest and most innovative battery manufacturer,” the bank’s analysts wrote. CATL is also on the investment bank’s list of top stock picks. Goldman sees it benefiting from the global sustainable electrification trend on the back of a “compelling battery product mix and resilient market share.” CATL shares are listed on the Shenzhen Stock Exchange and are included in the Amplify Lithium & Battery Technology ETF (weight 7%) and the KraneShares MSCI China Clean Technology Index ETF (weight 6.6%). Goldman has a price target of 307 yuan ($43.65) on the stock, giving it a potential upside of about 55%. Gotion Another Shenzhen-listed Chinese stock that Goldman likes is Gotion High Tech. The bank describes it as a “battery leader” in China, “recognizes Gotion’s potential as an early mover from a price-competitive domestic market to a lucrative overseas market, and expects further progress in overseas expansion to propel the stock.” The analysts added: “We see the stock as undervalued as the market has yet to factor in the potential overseas investment return.” Goldman has a buy rating on Gotion with a target price of 31.40 yuan, giving it a potential upside of about 66.4%. — CNBC’s Michael Bloom contributed to this report.
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Goldman identifies the best global battery stocks — giving 2 of them more than 50% upside
