According to Bank of America, EVs in China are “much more competitive than before” – and it will likely remain the world’s largest EV market by 2025. The bank said in a May 29 report that it still expects China to account for 40-45% of the world’s electric vehicle market by 2025, despite challenges from the U.S. Inflation Reduction Act and Europe’s Green Deal industrial plan. While this is down from the current level of nearly 60%, “Chinese EV offerings are more competitive than before and China will continue to see EV penetration expand,” the bank said. Bank of America shared some tips on how investors can position themselves in the country’s EV market. Stock Picks Bank of America said Chinese automakers are accelerating technological upgrades and innovations in their models, leading to an “excellent user experience”. But it’s selective for automakers. Its top picks are BYD – a stock owned by Buffett – and Li Auto for their “strengthened brand equity” and growing export sales. Bank of America said: “We reiterate Buy on BYD, given its impressive profit-per-vehicle improvement and overseas expansion story, while Li Auto’s solid sales and successful brand building and product strategy.” Its target price on BYD At HK$380 ($48.50), the potential upside is about 50%. For Li Auto, it gives the US-listed stock a target price of $37, or a possible upside of 27%. As for the EV market, Bank of America is particularly bullish on its battery supply chain. The top six EV battery suppliers in China account for 60% of the global total, up from 40% in 2018, the bank said. “Growth will be supported by expanding EV penetration in China and increasing overseas orders/share,” Bank of America analysts wrote. Its top pick for EV batteries is CATL, which said it recently upgraded its rating to “buy.” enter”. “We have a positive view on CATL as we believe it is competitive in the global market and should gain market share through its product innovation capabilities and cost control measures,” the bank said. It has a target price of 306 yuan ($43) for CATL, representing an upside of 38%. Another EV-related sector that Bank of America likes is copper. “Who can control the upstream and midstream of the supply chain will be particularly critical in the event of a shortage of key mineral supplies,” the bank said. China will control 44% of the world’s refined copper output by 2025, the bank said. “The raw material market is already tight and could get tighter going forward – we expect copper, aluminum, lithium, cobalt and nickel to be undersupplied by 8%-33% by 2030,” Bank of America analysts wrote. U.S. The bank’s top pick in copper is Chinese miner Zijin Mining, with a target price of HK$18, representing an upside of 71%. — CNBC’s Michael Bloom contributed to this report.