The battery stocks to buy as the electric vehicle market explodes: UBS

Tesla Supercharger
Getty Images

UBS has named its favorite electric vehicle battery stocks, as Tesla's "aggressive" cost-cutting drive shows that supply chain expenses can be "substantially" lowered while profitability improves.

The world is moving "rapidly" towards full electrification, the Swiss bank said. It sees global penetration of electric vehicles, or EVs, topping 80% by 2040, and worldwide demand for EV batteries increasing six-fold by 2025.

This booming demand is set to benefit Asian EV battery makers in particular, as they are best positioned to take market share away from incumbents, the UBS analysts, led by Tim Bush, said.

They listed their top battery stocks – all of which have a potential upside of around 30% or more.

More In Pro News and Analysis

CNBC ProBest trades on CNBC Tuesday: Pros pick their favorite energy names and compare retailer earnings
CNBC ProThe S&P 500 barely avoided a bear market. Here's how stocks have fared after previous 'near misses'
CNBC ProMaverick Capital increases bets on Carvana, Uber and Snowflake in the first quarter