Battery prices have been sliding, but Goldman Sachs continues to see promise in the sector, naming four market-leading stocks it’s overweight on. The investment bank’s analysts said global average battery prices could fall to around $80/kilowatt hour by 2026 compared to $110/kilowatt hour this year, in a Sept. 4 equity research note. At this level, battery electric vehicles, or BEVs, could “reach ownership cost parity with gasoline cars without subsidies, in turn supporting our structurally 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 leaders’ sizable R & D and capex to create a virtuous cycle that fuels their product development, in turn enhancing their market shares,” the analysts wrote. Looking ahead, they expect the battery industry to “stay consolidated” with the top five producers — CATL , LG Energy Solution, BYD , Panasonic , Samsung SDI — accounting for around 65% of the global market between 2024 and 2030. CATL Goldman is buy-rated on Chinese battery maker Contemporary Amperex Technology Co, or CATL. The company — which has a global market share of 40% — “is the largest and most innovative battery maker globally,” the bank’s analysts wrote. CATL is also on the investment bank’s conviction list of top stock picks. Goldman sees it benefitting from the sustainable global electrification trend on the back of its “compelling battery product mix and resilient market share.” Shares in CATL are listed on the Shenzhen Stock Exchange and are included in the Amplify Lithium & Battery Technology ETF (7% weighting) and KraneShares MSCI China Clean Technology Index ETF (6.6%). Goldman has a price target of 307 Chinese yuan ($43.65) on the stock, giving it potential upside of around 55%. Gotion Another Shenzhen-listed Chinese stock Goldman likes is Gotion High Tech . Calling it a “battery pioneer” in China, the bank “appreciate[s] Gotion’s potential as an early mover to transition from the price competitive domestic market to the lucrative overseas market, and expect further progress in overseas expansion to drive the stock.” “We view the stock as undervalued given the market has yet to factor in potential overseas investment return,” the analysts added. Goldman has a buy rating on Gotion at a price target of 31.40 Chinese yuan, giving it potential upside of around 66.4%. — CNBC’s Michael Bloom contributed to this report.
