Charge Your Portfolio with the Best EV Battery Stocks in 2025

• The future of transportation is electric. The future of energy is sustainable. - Elon Musk

Today, India is facing a growing crisis of air pollution and global warming, with cities like Delhi, Mumbai, and Bengaluru frequently ranking among the most polluted in the world.

Rapid urbanization, increasing vehicular emissions, and reliance on fossil fuels are key contributors to deteriorating air quality and rising temperatures.

In response to these challenges, adoption of electric vehicles (EVs) has gained momentum as a cleaner, more sustainable alternative to traditional gasoline-powered cars.

By reducing harmful emissions and lowering the carbon footprint of transportation, EVs are seen as a crucial solution in mitigating air pollution and combating climate change, supporting India's efforts to build a greener, healthier future.

According to the India Brand Equity Foundation (IBEF), the Indian EV market is forecasted to expand from US $3.2 billion (bn) in 2022 to US$ 114 bn by 2029, a compounded annual growth rate (CAGR) of 66.52%.

The initiatives/schemes launched by the government and non-government associations are as follows:

1. The imperative highlighted by a recent Confederation of Indian Industry (CII) report to set up 1.32 million (m) charging stations by 2030 presents a significant growth opportunity for the EV sector.
2. In phase II of the faster adoption and manufacturing of hybrid and EVs (FAME) India scheme, the Ministry of Heavy Industries (MHI) approved a capital subsidy of Rs 8 bn (US$ 96.1 m) to set up 7,432 EV public charging stations (EVPCS).
3. A dedicated policy FAME II with a budgetary outlay of Rs 100 bn (US$ 1.4 bn), to incentivize EV consumption and support manufacturing.
4. The government introduced the Electric Mobility Promotion Scheme (EMPS) with a Rs 5 bn (US$ 60.2 m) budget to enhance green mobility and stimulate EV manufacturing in the country. This scheme focuses on incentivizing electric two-wheelers (2W) and three-wheelers (3W), particularly for commercial use, offering subsidies of up to Rs 10,000 per vehicle.
5. The GST on EVs has been reduced from 12% to 5%, while the GST on chargers and charging stations for EVs has been lowered from 18% to 5%.
6. In May 2023, the Indian government reduced subsidies for electric 2W under the FAME II scheme, decreasing the incentive from Rs 15,000 to Rs 10,000 per kWh and lowering the subsidy cap from 40% to 15% of the vehicle's cost. This adjustment has increased the prices of popular electric scooters and 2W by Rs 20,000 to Rs 30,000, reducing their competitiveness against petrol vehicles?.
7. Subsequently, in the Union Budget 2024-25, the allocation for the FAME scheme was cut by over 44%, reducing the budget from Rs 48.1 bn in FY24 to Rs 26.7 bn for FY25.

EV battery manufacturing is critical to the rapidly growing electric mobility industry.

As the demand for sustainable transportation rises, companies are increasingly focused on developing high-performance batteries that offer longer ranges, faster charging times, and greater energy efficiency.

The manufacturing process involves producing advanced lithium-ion batteries, which power most modern EVs, and requires a complex integration of raw materials like lithium, cobalt, and nickel.

With technological advancements and a shift towards cleaner energy solutions, EV battery production is becoming a key driver in reducing carbon emissions and enabling the widespread adoption of EVs globally.

According to the IBEF, the Indian EV battery market is projected to surge from US$ 16.8 bn in 2023 to US$ 27.7 bn by 2028.

We wrote an article in 2023 highlighting the best EV battery stocks to watch out for in 2024.

In this article, we follow up on most of the previously mentioned companies and write about a new entrant in the industry.

These are not stock recommendations. Investors should do their own research and due diligence before considering any investment in the stock market.

Let's get started...

#1 Exide Industries

First on this list is Exide Industries.

Exide Industries is primarily engaged in the manufacturing of storage batteries and allied products in India.

The company manufactures batteries for the automotive sector including 2W, 4-wheelers (4W), 3W, E-rickshaws, and home UPS (uninterruptible power supply) (H-UPS). The company manufactures batteries not only for the automotive and industrial segments but also for non-vehicular applications and submarines.

The company had forayed into the lithium-ion segment for manufacturing lithium-ion cells with a total project capacity of twelve gigawatt-hour (GWh) and a project cost of Rs 60 bn to be completed in two phases. Phase 1 is expected to be completed by the end of FY25.

An investment of Rs 5.5 bn was made in the current financial year. The production is expected to start in mid-2025, followed by stabilization and customer approvals. This investment will cater to both mobility and energy storage markets.

The company is also engaged in developing, manufacturing, assembly, and sale of battery modules and battery packs with a battery management system (BMS) for e-mobility as well as stationary power applications.

The company is present in 60+ countries and is debt-free.

The company has almost all 4W, 3W, and 2W automotive companies as its customers in India. Its industrial customers include Emerson, Ericsson, Hitachi, Cipla, General Electric, Mitsubishi, Godrej, BSNL, Finolex, BHEL, Tata, NTPC, Indus Towers, and others.

Update: The company's subsidiary, Exide Energy Solutions Limited (EESL), signed a non-binding memorandum of understanding (MoU) with Hyundai Motors and Kia for strategic cooperation in the Indian EV market.

In the first half of 2024, the company delivered earnings before interest, tax, depreciation, and amortization (EBITDA) and profit before tax (PBT) margins of 11.4% and 9.0%, respectively.

Efficient procurement coupled with cost optimization initiatives have led to stability in operating performance, despite high commodity prices.

According to the management, in the near term, the business outlook is positive, and commodity prices easing is expected to support profitability.

The company is targeting EBITDA margin improvement to around 13% in the near term and 14% in the long term, with a focus on product mix optimization and profitable exports.

The company will resort to leadership hiring and organizational restructuring aimed at enhancing market presence and distribution strength and it plans to penetrate high-margin markets with new product offerings and expand its distribution network.

To know more, check out Exide Industries' financial factsheet.

#2 Amara Raja Energy & Mobility

Second on this list is Amara Raja Energy & Mobility.

Amara Raja Energy & Mobility (ARE&M) is the flagship company of the Amara Raja Group. It's the technology leader and one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry.

The company's business segments are as follows:

1. Automotive battery division: This division contributed 67% of overall revenue in FY24. It focuses on a range of applications, including 4W, 3W, 2W, and commercial vehicles. The company is the largest exporter of 4W batteries.
2. Industrial battery division: This division contributed 29% of overall revenue in FY24. It focuses on a range of applications, including telecom, railways, power control, solar, and UPS industries. The company is a market leader in the telecom sector.
3. New Energy & Mobility Division: This division contributed 4% to the overall revenue in FY24. Its offerings include lithium-ion cell and pack manufacturing, EV charging solutions, BMS, energy storage systems, power electronics for EVs and stationary applications, and home energy solutions. This division caters to both automotive and industrial clients.

ARE&M's Clientele

For the technology, it has invested in two start-ups (Log9, InoBat) and is open to more partnerships and organically developing technology.

The company planned a GIGA corridor in Divitipally, Telangana to manufacture lithium-ion batteries, in 2022.

The total capex announced amounted to Rs 95 bn and it had signed an MoU with the government of Telangana for the same. Phase 1 commercialisation is expected by FY26.

In Q2 FY25, the company recorded revenue of Rs 32.5 bn out of which lead-acid battery business accounted for Rs 31 bn.

The EV batteries and energy storage solutions recorded a muted performance as compared to the previous year. This was due to some delays in overall offtake in 3W, on the part of the original equipment manufacturers (OEMs).

Also, the charger revenues took a hit due to a change in product specifications, which the company has yet to make. The company believes these to be quarter-specific trends and expects a rebound in the upcoming quarters.

The company has set up a subsidiary company for manufacturing lithium-ion batteries. ARE&M has already invested Rs 8.5 bn in the subsidiary company out of which Rs 7 bn has been utilized.

In FY26, the company may invest about Rs 10 bn for the cost of equipment. Most of this funding is going to be through internal accruals and the rest through leverage.

ARE&M expects the margin to sustain at 14-14.5% on a standalone basis for the next couple of years. The company is expanding into new geographies, including Europe, and expects export growth at a CAGR of 15% over the next 3-4 years.

To know more, check out Amara Raja Energy & Mobility's financial factsheet.

#3 HBL Power Systems

Next on this list is HBL Power Systems.

HBL Power Systems manufactures and services different types of batteries, e-mobility, and other products.

The company ranks second globally in the industrial nickel batteries segment and third in India's valve-regulated lead-acid (VRLA) batteries segment.

It is also the only manufacturer of pure lead-tin (PLT) lead batteries in the country.

The company's business segments are as follows:

1. Industrial Batteries: This division accounted for 64% of the total revenues in Q1 FY25 vs 74% in FY23. The company offers VRLA batteries, PLT batteries, nickel-cadmium batteries, and lithium-ion batteries to telecom, oil and gas, power, and other sectors. Its industrial customers include Vande Bharat trains, Siemens, Hitachi, New York City metro, etc. This segment has grown by 40% between FY22 and FY24, backed by strong demand from the telecom sector.
2. Defense & Aviation Batteries: This division accounted for 18% of the total revenues in Q1 FY25 vs 13% in FY23. The company offers batteries for all aircraft, missiles, armored vehicles, etc. It also develops electronic fuses for ammunition and voice and data communications systems for armored vehicles. The segment revenue has declined by 2% between FY22 and FY24.
3. Electronics: This division accounted for 17% of the total revenues in Q1 FY25 vs 10% in FY23. In the railway electronics segment, the company offers two flagship products TCAS (Train Collison Avoidance System) and TMS (Train Management System).

In the electric mobility vertical, the company has developed electric drive trains and is designing thirty-five-ton and fifty-five-ton trucks, aiming to become a small-scale truck OEM.

Sales of these new products are expected to begin in H2 FY26. The electronics segment has seen revenue growth of nearly 300% between FY22 and FY24.

In FY24, the company derived 87% of total revenue from domestic sales vs 13% from exports. The company exports to 50+ countries.

The company operates 5 manufacturing plants across Telangana and Andhra Pradesh.

The company is implementing a capex plan of about Rs 1 bn in FY25, to make high energy density cells in-house. A pilot plant was set up in FY22 for Rs 0.4 bn. These cells will be for defence use only.

The company expects FY25 sales to remain at the same level as FY24, due to the absence of Kavach tenders from February 2022 until August 2024.

However, FY26 sales are projected to be 30% higher than FY25, following the issuance of Kavach tenders in August 2024. For FY27 and FY28, the company anticipates a CAGR of 20% over FY26, with a minimal moderation of EBITDA expected alongside this growth.

In the future, nickel-cadmium batteries may also be displaced if safer versions of lithium-ion batteries are made available.

To know more, check out the HBL Power Systems financial factsheet.

#4 Kabra Extrusion Technik

Fourth is the Kabra Extrusion Technik.

Incorporated in 1982, Kabra Extrusion Technik (KET) is a member of the Kolsite Group, specializing in the manufacturing of plastic extrusion machinery.

The company provides cutting-edge solutions for producing pipes and films and operates from two manufacturing facilities located in Daman.

Expanding its portfolio, KET ventured into the advanced lithium-ion battery pack business in FY21 through its battery manufacturing division, Battrixx.

The company's business segments are as follows:

1. Extrusion Machinery Division: This division accounted for 57% of the total revenues in FY24 vs 48% in FY23. It manufactures products like blown film lines, pipe extrusion lines, sheet extrusion lines, compounding lines, and auto-feeding systems. It caters to the packaging industry, infrastructure & construction, telecom, and plasticulture. The company has a 40% market share in this division.
2. Battery Division: This division accounted for 43% of the total revenues in FY24 vs 52% in FY23. It manufactures battery packs across multiple chemistries, BMS, and Internet of Things (IoT) solutions. It serves electric 2W, 3W, light commercial vehicles (LCVs), and swapping stations. The company has an 18% market share in this division.

The company's exports accounted for 10% of total revenue in FY24.

In FY23, Battrixx fully acquired Varos Technology, a Pune-based company specializing in the development of comprehensive BMS. These systems utilize cloud-powered artificial intelligence (AI) analytics to forecast battery lifespan and track their performance.

In the same year, Battrixx partnered with Hero Electric to develop 'Made in India' ultra-safe lithium-ion batteries for e-scooters. Battrixx is set to venture into additional industry verticals such as electric 3W and 4W in the forthcoming financial year.

KET recorded a revenue of Rs 1.3 bn in Q2 FY25, up 45% quarter on quarter (QoQ) and down 30% year on year (YoY), and an EBITDA margin of 17% which was the highest in the past twelve quarters.

To know more, check out Kabra Extrusion Technik's financial factsheet.

#5 Ola Electric

Next on this list is Ola Electric.

Ola Electric is an EV company that primarily manufactures EVs and core components for EVs. These components include battery packs, motors, and vehicle frames, all produced at the Ola Future factory.

The Ola Future factory produces EV scooters using a mix of in-house and third-party components, including cells. It can manufacture 1 m units per year making it the largest automated electric 2W manufacturing plant in India. The Ola Future factory had a capacity utilization rate of 49% in FY24.

The company is India's largest electric scooter manufacturer, with a 31% market share in the electric 2W sector, selling 329,618 scooters in FY24.

Ola aims to develop an EV hub in Tamil Nadu, including the Future factory, Gigafactory for cell production, and co-located suppliers. This hub will support the production of current and future EV scooter models. The company will begin to use its in-house lithium-ion cells in its electric 2W portfolio by Q1 FY2026.

Ola has 782 company-owned stores as of September 2024, with each store delivering 130 sales per quarter, roughly 2-3x of the industry average.

The company is going to expand its company-owned store (and co-located service infra) network to 2,000 company-owned stores by March 2025.

In addition to facilitating home charging through portable chargers, it also offers customers exclusive charging services through its charging network comprising 250 hyper charger guns and 764 standard charger guns.

Hyper charging guns are spread across 17 states and standard charging guns spread across 21 states, as of March 31, 2024.

The company received 2,994 customer complaints in FY24 about product quality and 1,742 complaints relating to vehicle servicing.

In India, electric 2W penetration is at an inflection point and has grown from 5.8% in June 2024 to 7.5% in September 2024, and in scooters from 16.1% in June 2024 to 21.4% in September 2024.

In key states like UP, Rajasthan, Karnataka, and Maharashtra, penetration is in the range of 25% to 45%. The company plans to introduce over twenty new products in the next two years, including 3W, which are as follows.

Ola's in-house technology capability across domains like software, motors, cells, and electronics, coupled with its vertically integrated manufacturing gives the company a significant competitive advantage on performance and cost.

The company's revenue increased by 38.5% YoY to Rs 12.4 bn driven by an increase in deliveries which grew 73.6% YoY from 56,813 units to 98,619 units in Q2 FY25.

The gross margins for the same period were at 20.6%. The company's focus on technology and vertical integration has a roadmap to take steady-state margins above 30% even after incentives fall away.

To know more, check out Ola Electric's financial factsheet.

Conclusion

With advancements in battery technology, increased range, and a growing network of charging infrastructure, EVs are becoming more accessible and practical for everyday use.

India is on track to become the largest EV market by 2030, with the rise in investment over the next 8-10 years.

With the onset of such a revolution in the EV and EV battery industry, be on the lookout for these companies before it's too late.

Happy Investing.

Disclaimer: This article is for education purposes only. It is not a recommendation and should not be treated as such. Learn more about our recommendation services here...