BofA picks 3 auto stocks to buy as ‘car wars’ heat up

A hybrid electric car charging station.
Boonchai Wedmakawand | Moment | Getty Images

Electric vehicles and other new models are set to boost three auto stocks in particular, according to Bank of America, which analyzed car companies' U.S. production pipelines.

Incumbent car manufacturers are likely to beat start-up EV companies, especially those that have gone public via reverse mergers with special-purpose acquisition companies (SPACs), BofA's analysts said in their "Car Wars" study, published Wednesday.

BofA's analysts led by John Murphy looked at new models likely to be produced in the U.S. from 2022 to 2025. They analyzed automakers' electric vehicle strategies as well as their replacement rate, or the volume of all-new models sold per year. "Replacement rate drives showroom age, which drives market share, which, in turn, drives profits, and ultimately stock prices," the analysts wrote.

BofA's buy-rated auto picks are: