Expert View: Missed out on Tesla? ‘There are other opportunities’ to invest in battery technology
Glenn Leese, an executive at TradingView, sees many investors thinking it’s too late to invest in battery technology.
“From my point of view the one thing to remember is there are more opportunities in the battery tech space than the average investor thinks,” he said.
“Investors and traders are looking for Telsa’s direct competition or something like that.
“But it’s such a massive industry that spreads up and down value and supply chains and it’s not one company that benefits from growth: it’s many companies and sectors and sub sectors.
“There’s a lot of investors who think things are overvalued or they’ve missed the boat. In some cases companies are overvalued but at the end of the day no one’s missed the boat, this is a booming market, a growing industry.
“There’s only going to be more opportunities, not less.”
Leese admits it might be difficult to find another large scale player like Tesla. But investors could find opportunities elsewhere.
Specifically from companies somewhere else in the supply chains or those which might have a foothold on niche requirements.
Two areas he says are worth looking at are long distance trucking and energy storage for mining companies.
“A battery is a product, so [ask] how does that to product get put together, what are components, where does it go, who’s involved, who’s the end user? And picking that apart is a more direct way for an investor to find an opportunity,” he said.
Leese did not rule out the prospect that companies without first mover advantage could succeed. But he warned more due diligence was required.
“When you look at companies shifting in, [ask] what’s their capacity to take a piece of the market – they may want to shift in the space but can they effectively capture that market?” Leese said.
“I’d be comparing that company’s strengths and weaknesses to companies in that space and ask ‘Can they compete once they get there?’
“If they can, there might be a chance to pick up those stocks before growth happens. Because they’re effectively moving into a market and haven’t had that value added to their stock price yet.
“But if not there’s nothing wrong with watching and waiting. For companies in the space it’s [about] not having a FOMO mentality – once they’re in you can see if they’re a serious player or not.”
If you don’t want to do diligence on lots of companies or put all your eggs in one basket, ETFs might be worth looking at.
There are only a handful of ASX ETFs to invest in that are purely focused on battery technology. Nevertheless, several more US-focused ETFs would include Tesla simply by virtue of Tesla’s membership in major US market indices.
One is ETF Securities’ Battery Tech & Lithium ETF (ASX:ACDC). This ETF is one of the best performing in the last 12 months, having gained over 60 per cent.
Leese said it might useful be for investors in that situation but it’s not for everyone.
“Everyone’s different. Some investors may enjoy picking apart a value chain and finding one, two or three opportunities in that chain itself.
“I guess If you’re a more broad investor and thinking to yourself, ‘I know the market is booming for batteries [but] I really don’t know how to get involved and I want exposure’, my first go-to would be to those ETFs and ACDC is a perfect example.”
Leese cited a report by Mordor Intelligence predicting Australia’s battery tech industry would reach $90 billion by 2025.
Australia’s low EV adoption levels and continued dominance of fossil fuel intensive industries like coal may make this seem a fantasy.
But Leese said Australia has made substantial progress over the last decade meaning this milestone isn’t too far off. And of course electric vehicles are just one use of battery technology.
“It [$90 billion] sounds like a lot but that’s only 12 per cent [more than] the current value of the industry – the industry is here, it’s developing and evolving,” he said.
“It’s steady growth at this stage rather than speculating its going to be a strong market. I think we can safely say it is a strong market and is only going to get bigger over time.”
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.