Bank of America: Billions are about to pour into EV infrastructure — and these stocks will benefit

Published Sun, Jul 4 20218:00 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Electric vehicle adoption is at an inflection point, according to Bank of America analysts who identified a new way to play the trend. An increasing need for EV charging technology is set to benefit a raft of global stocks, according to the bank, including semiconductor and Big Oil companies, as well as auto suppliers. Bank of America analysts led by Harry Wyburd flagged a rapid rise in ownership of electric vehicles, with EVs on Europe's roads up 100% since pre-Covid. In a research note published last week, they wrote: "Our updated charger forecasts see c. [circa] $80bn of potential charging infrastructure investment by 2040E [estimate]." The bank estimates there are currently around nine public charging points per 100 electric vehicles in Europe and expects the number to rise as more of the cars hit the road. BofA also expects "significant" growth in home charging points, with around 60 million electric connectors by 2030. BofA's stock picks include: Semiconductors "We estimate that power semiconductor demand related to charger deployments in Europe can increase from low tens of millions of US dollars per annum to c$50m per annum by 2025 and c$100m per annum by 2030," the analysts stated, picking Infineon and STMicro as beneficiaries of this. Oil majors Big Oil can create "significant value" from "shifting their equity story to Big Energy," with more of a focus on decarbonization, according to BofA. Its analysts noted the shift was becoming more urgent for these companies, given shareholder pressure and the Hague District Court's demands for Shell to meet climate targets set out in the Paris Agreement. The analysts picked BP , Shell and Total and said: "We believe EV charging will grow in importance in linking Big Oil's existing Marketing footprints (including global brand recognition and backing from their commodity trading desks) with Big Oils' expansion into electricity supply." Auto suppliers Valeo makes parts for EVs of all sizes as well as a range of charging components for the likes of VW and Mercedes. It is buy-rated by BofA, which noted that its joint venture with Siemens now has around a 40% market share of the high voltage charging sector. Metals and mining Copper producer Antofagasta and miner Boliden are buy-rated picks for BofA, with copper likely to be a key part of EV chargers as well as inside the vehicle. "New technologies such as renewables, energy storage and electric vehicles that are gaining traction have one thing in common: they require a set of commodities we define as MIFTs, or metals important for future technologies," BofA's analysts wrote.

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