These Canadian stocks benefit from U.S. electric vehicle pledge – by Scott Barlow (Globe and Mail – August 10, 2021)

U.S. President Joe Biden and the major U.S. automakers have pledged to set a target for electric vehicle sales of 50 per cent of total purchases by 2030, highlighting the steady (and heavily subsidized) trend toward decarbonized and electrified developed world economies.

The global research team at Bank of America Securities is attempting to identify the biggest corporate beneficiaries of the electrification movement, recommending stocks across industry sectors and including a significant number of Canadian companies.

BofA strategist Thomas Thornton, in a recent research note, raised his 2025 EV sales forecasts from 4.5 per cent to 7 per cent of total sales; by 2030, he now expects EVs to account for 20 per cent of total sales, up from 12.5 per cent.

These estimates, far lower than the newly announced presidential targets, are based on subsidies at current levels – US$7,500 a vehicle. B of A projects that if Congress can approve a jump to US$10,000 an EV, the 50-per-cent market penetration goal for 2030 can be achieved.

In either scenario, Mr. Thornton sees General Motors Co. as the best positioned auto manufacturer as it is launching new EV models in the next four years.

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