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After a heady two years, electric vehicle and battery stocks have plunged in value as investors have shunned them. But investors continue to pursue private battery startups. This week, we look at why investors continue to fund battery startups in uncertain times.

In 2020 and 2021, Wall Street erupted in a short-lived electric vehicle and battery mania: Multiple U.S. and European EV and battery startups went public, each of them collecting hundreds of millions of dollars from investors. More recently, investors have suffered remorse over those buys: Shares of QuantumScape, a developer of solid-state lithium-metal batteries, rose threefold in the month after the company went public in November 2020 but this year are down 53%, far outpacing the Nasdaq’s 21% decline. Enovix, a silicon anode developer, is down 51% year to date, and Rivian Automotive, 67%.

But here’s the curious thing: Some investors remain bullish on, and continue to pour money into, battery startups, in the belief that there is money to be made or that better batteries are essential to their own future. Last month, Wildcat Discovery Technologies, a battery research lab based in San Diego, raised $90 million to develop what it called a battery “Supercell.” Nyobolt, a U.K. battery developer, raised $59 million to fund technology for charging EV batteries in five to 10 minutes. And U.K. startup Brill Power last month raised $10.5 million to develop a battery management system.