QS and 2 More Stocks to Watch in the EV Battery Space in 2026

Industry Overview - Electric vehicles (EVs) are increasingly integral to global transportation, driven by advancements in battery technology that enhance battery life, charging speed, and production costs, thereby narrowing the price gap with gas-powered vehicles [1] - The global EV battery market was valued at approximately $69 billion in 2024, with projections of $77 billion in 2025 and $115 billion by 2032, indicating a compound annual growth rate (CAGR) of 6% from 2025 to 2032 [2] Demand for Batteries - The rising number of electric vehicles on the road is expected to significantly increase demand for batteries, which are crucial for determining an EV's range, charging speed, performance, and overall cost [3] QuantumScape Corp. - QuantumScape is focused on developing solid-state lithium batteries for EVs, promising higher energy density, faster charging, and improved safety, with notable progress despite being pre-revenue [5] - The company announced a breakthrough in manufacturing with its Cobra process, which is 25 times faster and more compact than its previous system, facilitating scalable production [6] - QuantumScape has begun B1 sample deliveries, allowing automakers to evaluate its cells, and reported $12.8 million in customer billings for the first time, indicating early commercial traction [7] - The Zacks Consensus Estimate for QuantumScape's 2026 bottom line suggests a 15.5% improvement from projected 2025 levels [8] Toyota Motor - Toyota, one of the largest automakers, is investing heavily in battery manufacturing to catch up in the EV market, with a new battery plant in North Carolina capable of producing up to 30 GWh annually [9] - The facility will support production for hybrids and battery electric vehicles, with initial output powering models like the Camry HEV and RAV4 HEV, and plans for additional lines through 2030 [11] - Toyota is also enhancing its U.S. battery supply chain with a $1.5 billion agreement with LG Energy Solution and a $50 million investment in a battery development lab in Michigan, set to open in 2026 [12] - The Zacks Consensus Estimate for Toyota's EPS in the next fiscal year indicates a 20% year-over-year increase [13] Tesla Inc. - Tesla is a key player in battery design and production, focusing on its in-house 4680 lithium-ion battery program to reduce costs and reliance on external suppliers [14] - The company has produced 100 million 4680 cells and claims these in-house cells are now more cost-effective than those sourced externally [15] - Recent supply-chain adjustments suggest Tesla is pacing its 4680 production ramp more conservatively, balancing in-house production with sourcing from partners like CATL and Panasonic [16] - The Zacks Consensus Estimate for Tesla's 2026 EPS indicates a 42% improvement from projected 2025 levels [17]