EVs vs. Battery Metal: What’s A Better Buy in 2024?

Take a closer look at these EV and battery metal TSX stocks to identify the better holding for your self-directed portfolio right now.

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The S&P/TSX Composite Index remains volatile in 2024 after a turbulent year in 2023. After several ups and downs, the Canadian benchmark index is up by 1.78% year-to-date but 0.96% below its 52-week high.

As we look forward, there is a growing focus on several sectors of the economy. The world is gradually phasing out traditional energy commodities in favour of greener and cleaner alternatives. The green energy space is expected to grow significantly in the coming years.

To this end, there are several stocks investors interested in exposure to greener energy can focus on, including Electric Vehicle (EV) stocks and battery metal stocks.

Today, we will discuss a stock from each of these spaces to see which might be a better holding to leverage the growing focus on greener energy.

An EV stock

Lion Electric Co. (TSX:LEV) is a Canada-based urban vehicle manufacturing company. Headquartered in St. Jerome, this is a lesser-known name in the global EV space. Rather than producing sedans or SUVs, Lion Electric is in the business of producing battery-powered buses.

While it might not seem like an exciting business, the company has carved out a niche within the growing EV industry that it can leverage to grow shareholder value alongside the growth of the broader industry.

The company’s third quarter of fiscal 2023 showed that the demand for its products is growing. In that quarter, it doubled its sales year-over-year, reporting a gross profit of US$5.4 million.

Compared to a loss of US$3.8 million in the same period in the previous year, it marked a significant improvement. As of this writing, the stock trades for $1.99 per share, close to its 52-week low. It could be an excellent time to shore up on its shares while prices are down.

A battery metal stock

Parrot Battery Metals Inc. (TSXV:PMET) is a Toronto Stock Exchange Ventures-listed stock. Headquartered in Vancouver, it is a mineral exploration company. The company specializes in acquiring and developing mineral projects that focus on battery, base, and precious metals. Founded in 2007, PMET stock went public in July 2022.

Within battery materials, it focuses more on lithium, a highly sought-after material for batteries used by the EV industry and pretty much every bit of tech that involves rechargeable batteries. In addition to owning 100% of Corvette Lithium Property, which is spread over 200 square kilometres, it has several other mining projects that show promising signs of copper and gold reserves.

Without companies like Patriot Battery, EV companies would not have the materials to make their products. As of this writing, Patriot Battery stock trades for $8.62 per share, up by 247% from its price at inception on the stock market. While there are other, more well-established Canadian lithium stocks, there is plenty of room in the market for PMET stock to grow.

Foolish takeaway

EV stocks hold a lot of promise for investors in the long run. However, it is difficult to deny that battery material stocks offer plenty of promise as well. With both companies relatively new on the TSX, there isn’t a long-term track record to identify which has been the better performer of the two.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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