The world of energy storage and batteries is littered with disaster stories for investors. Charts that look like this two year depiction of Active Power Inc.’s price history are commonplace.
In fact, if you go even further back, it looks worse. In July of 2000, optimism was such that ACPW was trading above $350. Obviously, then, care has to be taken when recommending stocks in the area and even more care should be taken before acting on any such recommendation.
The temptation to do so can be strong. The case for investing in battery and storage companies is compelling and well publicized. The rapidly expanding global use of batteries in low and zero emissions vehicles, and the increasing need to store solar and wind generated power make it seem like an obvious play. The problem is that, like solar power itself, the battery and power storage industry has been a long time coming.
Many of the companies, including Active Power, have never been able to translate potential into profit. In this situation, however, given the obvious potential of the business, this record will not deter continued investment in the sector. That potential has been seen this week, as China BAK battery (CBAK) stock jumped 100% on Tuesday. This happened on news that South Korea’s LG Chem is planning to build an electric car battery factory in China. They will be building batteries for around 100,000 cars per year and CBAK, as a manufacturer of lithium battery cells,…