Battery prices have been falling, but Goldman Sachs remains bullish on the industry’s prospects and named four market-leading stocks as overweights. The investment bank analyst said in an equity research report on September 4 that the global average battery price may fall to around US$80/kWh by 2026, compared with US$110/kWh this year. At this level, battery electric vehicles (BEVs) could “achieve the same cost of ownership as gasoline vehicles without subsidies, supporting our structural optimism for battery demand growth,” they wrote. Their comments come as leading battery manufacturers continue to introduce new products with higher energy density and lower costs. “We expect large-scale R&D and capital expenditures by leading players to create a virtuous cycle, driving their product development and thus increasing their market share,” the analysts wrote. Going forward, they expect the battery industry to “remain consolidated,” with the top five Well-known manufacturers – CATL, LG Energy Solution, BYD, Panasonic, Samsung SDI – will account for approximately 65% of the global market between 2024 and 2030. CATL Goldman Sachs is buying – a rating on Chinese battery maker Contemporary Amperex Technology Co., Ltd. (CATL). The bank’s analysts wrote that the company has 40% of the global market share and “is the world’s largest and most innovative battery manufacturer.” CATL is also on the investment bank’s preferred stock list. Goldman Sachs believes the company will benefit from sustainable global electrification trends with its “compelling battery portfolio and resilient market share.” CATL’s shares are listed on the Shenzhen Stock Exchange and are included in the Amplify Lithium Battery Technology ETF (weighting 7%) and the KraneShares MSCI China Clean Technology Index ETF (weighting 6.6%). Goldman Sachs has a price target of 307 yuan ($43.65) on the stock, giving it a potential upside of about 55%. Guoxuan High-Tech Another Shenzhen-listed Chinese stock that Goldman Sachs is bullish on is Guoxuan Hi-Tech. The bank calls it China’s “battery pioneer” and “appreciates Guoxuan’s potential as a first mover to transition from a highly price-competitive domestic market to lucrative overseas markets, and expects further progress in overseas expansion to drive the stock’s growth.” “The analyst added: “Given that the market has not considered potential overseas investment returns, we believe the stock is undervalued.” Goldman Sachs gave Guoxuan a buy rating, with a target price of RMB 31.40, and a potential upside of approximately 66.4%. —CNBC’s Michael Bloom contributed to this report.
