President Joe Biden recently proposed a $2 trillion infrastructure bill to repair America’s crumbling infrastructure – an infrastructure that has earned a C- score from the American Society of Civil Engineers. Biden elaborated that his plan is to “… put us in a position to win the global competition with China in the upcoming years.” With Democrats controlling both the House and the Senate, there is a high probability that this bill will actually be passed. What follows is a breakdown of Biden’s proposal and some commentary on companies that would benefit from it.
ACTC is a SPAC that is planning to merge with Proterra. Proterra is an American automotive and energy storage company specializing in electric public transportation fleet-level chargers and energy management, and currently holds multiple contracts for electric buses. Furthermore, Proterra also has a great leadership team with prior experience working for Tesla, Navistar, Honda, and other automotive companies. Biden’s infrastructure proposal contains a $174 billion investment in the EV Market, which includes the electrification of at least 20% of the nation’s yellow school buses and the replacement of 50,000 diesel transit vehicles. ACTC’s stock is up, and it’s pricing very nicely for potential partnerships.
Operating in 14 countries, ChargePoint Holdings is an electric vehicle infrastructure company based in California that makes and operates the largest online network of independently owned EV charging stations. ChargePoint is leading the field in creating a peer-to-peer roaming agreement that allows electric vehicle drivers to charge wherever they go. As mentioned in the previous paragraph, Biden’s infrastructure proposal contains a $174 billion investment in the EV Market, which includes plans to build a national network of 500,000 charging stations by 2030. In addition, Biden plans to invest $46 billion for federal purchases of electric cars, charging ports, and electric heat pumps for housing and commercial buildings. It’s a certainty that CHPT is in an excellent position to take advantage of a good number of the projects that will be coming down the pike.
Taiwan Semiconductor Manufacturing Company is the world’s largest semiconductor foundry, manufacturing 10,761 different products for 499 different customers. TSM is the pure-play foundry business that solely focuses on manufacturing customers’ products. They do not design, manufacture, or market any semiconductor products under their own name. In Biden’s infrastructure plan, he calls for a $50 billion investment to boost the U.S. semiconductor industry. This $50 billion will be spent in part on domestic manufacturing, chip research, and the construction of plants. Semiconductors are used in all sorts of things including electric vehicles (remember, Biden plans to invest $174 billion in the EV Market), computers, and mobile phones (he’s also investing $100 billion in digital infrastructure). TSM is not a U.S. company, however, they will benefit from Biden’s bill as they plan to build a $12 billion manufacturing plant in Arizona, with construction starting this year. The plant is set to begin its volume production in 2024, with a monthly goal of producing up to 20,000 silicon wafers.
Enphase Energy designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the U.S. and internationally. For their solar setups, they utilize a microinverter under each solar panel to efficiently convert energy at an individual solar module level, so that if one panel fails, the entire system won’t go down as it would in a traditional solar setup. Enphase has installed over 32 million of these microinverters in more than 1.4 million homes. In Biden’s infrastructure plan, $100 billion is targeted at funding the electric grid and making it more resilient to climate disaster. He has also embraced the goal of America’s power being carbon-free by 2035. Furthermore, Biden has proposed extending for 10 years both the direct-pay investment tax credit and the production tax credit for clean energy generation and storage. He is also planning to establish an energy efficiency and clean electricity standard with the aim to cut down power bills and pollution. Given Biden’s clean energy generation and storage incentives, more homeowners will no doubt be looking at Enphase’s solar and storage systems.
Caterpillar is one of the most iconic brands in the United States. They design, develop, engineer, manufacture, market, and sell machinery, engines, financial products, and insurance. No matter how large a construction project is – whether road, bridge, building, or rail – Caterpillar will most likely be the brand of choice to use. With the earmarking of $115 billion for roads and highways, $20 billion for road safety improvement, $80 billion for Amtrak’s repair backlog and the modernization of their Northeast Corridor line, $213 billion for housing, and $12 billion for infrastructure needs at community colleges, Caterpillar is bound to benefit from Biden’s infrastructure plan.
American Tower Corporation is a real estate investment trust that owns, operates, and develops wireless communications and broadcast towers. It leases antenna sites on multi-tenant towers to the wireless communication industry as well as to television and radio stations. It’s one of the largest such companies in the U.S with over 22,000 communications sites. Biden is hoping to invest $100 billion into digital infrastructure in order to give every American, urban and rural, access to affordable, reliable, and high-speed broadband. There is no way to know at this stage which wireless carrier will benefit the most (AT&T, T-Mobile, and Verizon are three of the biggest) and that is why American Tower is the better pick as all three of these companies require wireless communication towers. American Tower has recently signed a 15-year contract with T-Mobile, since 2015 has held exclusive rights to 11,448 wireless communications sites from Verizon, and in 2019 signed a long-term agreement with AT&T.
President Biden’s infrastructure plan is definitely controversial, with many worried about the national deficit growing as a percentage of G.D.P. However, supporters of his bill claim that the potential growth in the G.D.P will in the long run pay for the deficit.