Why Battery Investments Should Focus on Value, Not Just Price

In a market flooded with price tags, real investors chase what’s behind them — value.

1. Why You Shouldn’t Just Look at the Price

Most people look at price first when considering an investment. It’s natural — price is visible and immediate. But smart investors know that price merely reflects value, and value is what ultimately drives returns.

Sometimes price falls even when value rises. Sometimes the opposite happens. But value investors stay grounded, trusting that price will eventually realign with intrinsic worth. Trying to predict short-term price movements is like chasing shadows. Even solid companies can see their stock prices halved for years. That’s why investing based solely on price can be risky — it’s the value behind the price that matters most.

2. The Future of the EV Market

To understand the future of batteries, we must first envision the future of electric vehicles (EVs). Each year, around 80 million cars are sold globally. In 5–8 years, over half of those are expected to be electric.

For that transition to happen, affordability is key. The average internal combustion car sells for around $30,000. EVs must match that price point — ideally without subsidies — for the mass market to fully adopt them. That means a future with 40 million+ affordable EVs on the road each year.

3. Why Battery Costs Matter So Much

Batteries account for about 40% of an EV’s production cost. And within the battery, cathode materials make up around 40% of that cost. Cathodes are one of the four core battery components and are critical for energy density and overall performance.

If EV prices must stay below $30,000, battery prices can’t rise much. Automakers won’t tolerate high battery costs because they need to keep final vehicle prices low. This naturally puts pressure on cathode pricing. In essence, cathode costs set the ceiling for battery pricing.

4. Can NCM Batteries Keep Up?

The dominant battery chemistry today — NCM (Nickel-Cobalt-Manganese) — relies on rare metals that are expensive and increasingly scarce. If EVs are to remain under $30,000, the NCM chemistry will struggle with cost constraints.

There’s a hard limit. If battery prices can’t rise indefinitely, and cathode prices can’t either, then NCM batteries — unless reinvented — face long-term limits to their scalability and market share.

5. Why Alternative Battery Technologies Are Rising

Due to cost pressures on NCM batteries, alternative chemistries like LFP (Lithium Iron Phosphate) are gaining traction. Chinese giants like CATL and BYD are already leading the charge — producing over twice the volume of Korea’s top three cell makers last year alone.

And beyond LFP, sodium-ion batteries are emerging. If these become the new standard, it could rewrite the entire battery industry. Technology shifts like this are among the biggest risks in industrial investing. Betting everything on the wrong standard can lead to massive losses. That’s why flexibility and foresight are crucial.

6. What to Watch for in Battery Cell Companies

Battery cell manufacturers build the core products, but their business models carry two inherent challenges:

1. Low Pricing Power: EV automakers are the final customer — and they resist high battery prices. Even if supply is tight, price hikes are capped because they impact EV pricing and market demand.
2. High Reinvestment Needs: Battery companies must constantly expand capacity to compete. This creates a capital-intensive cycle — low margins require high volume, which demands relentless reinvestment. When everyone builds more factories, oversupply risk looms.

7. Charging Infrastructure Will Change the Game

Today, EVs need long driving ranges because charging stations are scarce and fast-charging technology has limits. That’s why NCM batteries — with higher energy density — dominate.

But as charging stations become widespread, range anxiety will shrink. Once charging becomes quick and accessible, the need for expensive high-range batteries will fade. This shift could dramatically reduce the pricing power of NCM technology, reshaping the battery landscape.

8. Investing in Batteries: A Strategic Perspective

Battery investing requires a long-term mindset. Instead of chasing today’s headlines or market prices, look 3–5 years ahead. Be flexible — technological standards can shift. Don’t lock into one chemistry or assume the current market leaders will remain on top.

The key is to form your own view of the future. Understand the assumptions behind industry trends. And remember:

• Focus on value, not price.
• Think long-term, not short-term.
• Stay flexible, not fixated.

That’s how you stay ahead in one of the most transformative industries of our time.