Reasons for the downturn in new energy battery stocks

Are rising interest rates hurting energy stocks?

Rising interest rates have hurt the potential returns of some of these projects. After a strong run for some energy stocks in the fall, the rally fell flat this week with many nuclear and renewable energy stocks dropping.

Why are battery prices so low in China?

Companies in China faced fierce competition this year. These conditions resulted in falling battery prices and lower battery margins, forcing many battery manufacturers to enter new markets, including energy storage, while also eyeing overseas markets willing to pay more for batteries. The industry has also benefitted from low raw material prices.

Why is the energy sector struggling?

Here are two reasons why the sector is struggling. Firstly, the energy stocks are facing cost-related pressures. We all know that headline inflation is high at the moment. The latest figures show that it’s running at over 5% in the UK.

Are battery manufacturers having hard times this year?

Battery manufacturers are having hard times this year. LG Energy Solutions and Samsung SDI recently posted falling quarterly revenues and profits, while Panasonic’s battery division missed its targets. Even the world’s largest battery maker, CATL, reported its first drop in quarterly profit earlier this year.

Is EV battery demand rising?

Global energy storage installations — including residential, commercial and utility scale — account for a growing share of total battery demand, rising from 6% in 2020 to an expected 13% this year. Put another way, the ratio of EV battery demand to stationary battery demand has fallen from 15-to-1 to 6-to-1 over the last four years.

Will new tariffs on finished battery products lead to distortionary pricing dynamics?

Yayoi Sekine, head of energy storage at BNEF, said: “One thing we’re watching is how new tariffs on finished battery products may lead to distortionary pricing dynamics and slow end-product demand.