Best Battery Stocks in India 2024 – Power Your Portfolio

Overview

As the world’s third-largest emitter, India, under the leadership of its third-time Prime Minister, Narendra Modi, has pledged to achieve net-zero emissions by 2070. To achieve this ambitious goal, the focus has shifted towards electric vehicles (EVs), largely raising the demand for Lithium-Ion (Li-Ion) batteries.

Batteries, though seemingly small, act as the heart of any machine, remote, electric vehicle, or device, powering the entire system. With the vision of a growing energy transportation and infrastructure network, the importance and need of domestic battery manufacturing are expected to rise in the future. Considering this impact, this blog will explore the potential future of battery stocks in India, highlighting some of the most promising options.

What Are Battery Stocks?

Battery stocks are shares of companies that make, develop, or distribute batteries and energy storage solutions. These companies produce batteries for electric vehicles, renewable energy storage, consumer electronics, and more, depending on the company’s vision and their clientele.

Features of Battery Sector Stocks

Here are some features that an investors should look for:

Market Demand

The demand for electric vehicle lithium battery stocks in India goes beyond electric vehicles. It includes renewable energy storage and portable devices, affecting the market dynamics of lithium stocks in India.

Supply Chain Resilience

The present battery production is based on a global supply chain. Access to raw materials, geopolitical stability, and manufacturing capabilities are crucial for stock performance.

Regulatory Landscape

Government policies and environmental regulations significantly impact the battery sector. You should be aware of regulations on emissions, recycling, and energy storage incentives.

Competition and Partnerships

The battery sector is competitive. Companies forming strategic partnerships or improving production efficiency may offer compelling investment opportunities in Indian lithium stocks.

Overview of the Lithium-ion Battery Sector in India

Lithium-ion batteries, introduced in the 1990s, are a leading eco-friendly energy source. They power modern smartphones, electric vehicles, inverter batteries, children’s electric bikes, lithium-powered batteries, and drones. India imports most EV batteries, semiconductors, and Battery Management Systems (BMS) from countries like China, Japan, and Korea. However, Indian manufacturers are increasingly developing batteries tailored to the local market.

With the recent discoveries of new lithium reserves in Rajasthan, J&K, and Jharkhand, the government holds the potential to not only produce but also export the lithium-ion batteries globally. The potential future of the battery sector in India is looking astonishing, giving investors a scope of investment, watching it grow with time.

Role of Indian Government in the EV Transformation Drive

The government recognizes the potential of electric vehicles (EVs) and the vast market opportunities in EVs, solar-distributed renewable energy, energy telecommunications towers, and data centres in India.

To support this, the government has allocated a budget of ₹18,000 crores for producing Advanced Chemistry Cell (ACC) batteries. Additionally, the government is considering battery swapping policies and has released a draft policy to accelerate EV adoption nationwide, encouraging electric vehicle tax exemptions.

To further promote the initiative, the state has launched schemes like FAME-II offering subsidies on EV purchases, making them more affordable for consumers. Campaigns like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme encourage the installation of public charging stations across highways and urban areas, addressing range anxiety among potential EV buyers.

The government is also exploring battery swapping policies to offer quicker turnaround times for electric two-wheelers and three-wheelers, a major segment of the Indian market. They are also providing lower GST rates on EVs and EV chargers.

Government agencies are actively involved in funding research and development projects focused on improving battery technology. In 2023 alone, the government assigned ₹1,000 crore ($1.25 billion) for research initiatives related to advanced battery storage solutions.

Benefits of Investing in Battery Stocks

Let’s take a look at the benefits of investing in battery stocks:

Notable Growth Potential

The demand for lithium-ion battery stocks in India is rising due to electric vehicles, renewable energy storage, and portable devices. Investing in lithium shares allows you to benefit from this expanding market.

Shift Towards Green Energy

Battery manufacturing companies are crucial for the shift towards Green energy. As the world embraces renewable sources, batteries are important for storing energy and stabilising power grids, supporting global sustainability efforts.

Technological Innovation

Battery companies are at the forefront of advancements like improved energy density, faster charging, and longer lifespan. Investing in this sector means being part of exciting breakthroughs in battery technology.

Also Read: Sustainable Infrastructure

Risks of Investing in Battery Shares

Here listed few setbacks that can cause your investment a complete turnaround if the sector won’t work right:

Highly Competitive Market

The battery industry is highly competitive. Companies with a strong competitive edge are more likely to succeed.

Constant Regulatory Changes

Government policies and regulations can significantly impact the battery industry. Staying updated on potential regulatory changes is crucial.

Supply Chain Challenges

Battery manufacturing companies depend on a global supply chain. Any disturbances in raw material availability can affect share prices and performance. Assess how companies manage supply chain risks.

Market Volatility

Battery stocks can be subject to market volatility influenced by economic conditions and investor sentiment. Be prepared for fluctuations that could impact your investments.

Top Battery Stocks in India for 2024

Now let’s take a look at some potential top battery stocks in India, leading in the stock market in 2024:

Conclusion

The Indian battery sector is about to witness significant growth i.e. also encouraged by the government to push for electric vehicles (EVs) and the increasing demand for energy storage solutions. Investing in battery shares can add a diverse touch to your portfolio while keeping it updated as per the changing needs of the market. However, remember that investing in stocks requires careful research and consideration of your risk tolerance and investment goals.

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