Electric and hybrid vehicles will account for nearly half the cars on the road by 2040, Goldman predicts

Published Mon, Apr 4 20221:32 PM EDTUpdated Mon, Apr 4 20222:18 PM EDT

Goldman Sachs is raising its electric vehicle forecasts, saying it anticipates "significant growth in EV adoption particularly beyond 2030." The impacts will be felt across industries — including on the power grid — and the firm put together a basket of stocks across sectors that stand to benefit. Goldman now expects EVs — which it defines as both battery electric and plug-in hybrid vehicles — in the U.S. to make up 15% of total cars on the road by the end of this decade, up from prior estimates of 13%. By 2040, the firm expects that number to hit 46%, up from a prior forecast of 32%. In terms of vehicle sales, Goldman believes EVs will be 55% of sales in the U.S. by 2030 and 84% of sales by 2040. "The impact of EVs on power demand and the potential for incremental investment will benefit companies across several industries," the firm wrote in a note to clients. While Goldman doesn't expect the impact on power demand from EVs to grow immediately, as they become more prevalent, it will have an impact on the grid. The firm said this could help transmission and distribution utilities such as Sempra Energy and Edison International . Clean-energy focused NextEra is also "well positioned to provide renewable energy to meet increase power demand from EVs," the firm noted. "This impact on power demand growth rates is material enough in our view that utilities supporting the power grid will need to address it, and we anticipate EV related infrastructure investments to ramp up in the latter half of the 2020s," Goldman added. Ultimately, the firm said power demand from EVs could lead to $183 billion in capital spending by 2040. Tesla stands to benefit due to its leadership in the EV space, but the growth of electric vehicles will also benefit parts suppliers. With this in mind Goldman pointed to Aptiv , Sensata Technologies , Jabil and TE Connectivity , among others. Companies that make charging components such as Enphase Energy and SolarEdge are also poised to benefit, according to Goldman. Meantime residential solar names like Sunnova and Sunrun could see upside from consumers pairing their EVs with an at-home solar system in an effort to offset costs from increased power load from the EV. Finally, the firm said metals companies such as Freeport-McMoRan and Alcoa could benefit due to their exposure to the EV theme and power infrastructure more broadly. — CNBC's Michael Bloom contributed reporting.

A Tesla dealership in Colma, California, on Wednesday, Jan. 26, 2022.

David Paul Morris | Bloomberg | Getty Images

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