The U.S. automotive market had a wild 2025, thanks to the uncertain climate under President Donald Trump’s mercurial tariff policy. Still, analysts at Bank of America believe that at least three U.S. car companies are worth investing in.
Carmakers such as Ford played the change in the U.S. economic policy perfectly. Ford rode dealer incentives, combined with consumer anxiety about tariffs, to become the top-selling brand in the U.S. during the year’s first half. Ford said total sales in the second quarter rose at a rate seven times that of the overall auto industry.
It sold 1.1 million units in the first six months, a 6.6% year-over-year increase.
But Ford wasn’t the only beneficiary. GMincreased its U.S. market share above 17%, representing the most substantial presence in the U.S. since 2017, while other brands also saw sales rise.
“Automakers are providing healthy incentives to keep sales flowing. Prices are trending higher, but just as we are seeing in the broader retail markets, there’s sufficient demand and generous incentives out there, and that’s driving the market,” said Cox Automotive Executive Analyst Erin Keating earlier this year.
But that was 2025.
It is a new year, and analysts at Bank of America see a different landscape for automakers in 2026.
Ford
Bank of America reinstates “buy” ratings on Ford, GM, Tesla
On Wednesday, March 4, Bank of America reinstated its coverage of the North American Automotive sector.
It picked three winners to which it assigned “buy” ratings: Ford, General Motors, and Tesla.
Related: Tesla proves it truly is a tech (not car) company with latest move
“We highlight Ford & General Motors (see reports) as OEM top picks as we see potential for upward estimate revisions given the shift away from EVs and emissions mandates that limited profitability over the past several years,” the firm said in a research report emailed to TheStreet.
BofA sees upside in U.S. sales, as its forecasts for both sales and production are above industry estimates. It says pent-up demand from years of constrained supply will coalesce with “slowly improving” affordability to drive more demand.
Here’s what the firm said about each company in its research report.
Ford gets “buy” rating and $17 price target, a 34% upside from March 4 opening price
- “We think Ford is positioned well to capitalize on the significant shift in the regulatory backdrop under the current administration that should enable it to shift focus to its most margin accretive trucks/SUVs. We expect near-term benefits as Model E losses abate and the company’s high-margin commercial business stabilizes. We expect Ford to make progress toward its 8% EBIT margin guide (from 4.8% in 2026E), including a large step-up in 2027.”
- “Ford improved its U.S. market share by 50bps in 2025, and we estimate the company is third in total share (with 13.2% retail share, including medium/heavy-duty trucks). Ford’s strong position is anchored by its #2 rank in pickup trucks (by unit volume), where it holds over 30% share, and by its F-Series, which is the #1 U.S. nameplate. Positively, Ford’s share in pickups is up by more than 300bps over the past two years.”
General Motors gets “buy” rating and $105 price target, a 14% upside from March 4 opening price
- “We are reinstating coverage of General Motors with a Buy rating and $105 price objective based on an EV of 3.5X our 2027 EBITDA. We believe GM is a key beneficiary of recent regulatory changes, including the removal of CAFE penalties and GHG relief, which are enabling a mix shift toward its most margin-accretive trucks/SUVs and away from unprofitable EVs. The evidence is compelling: we estimate that the variable profit per unit for trucks/SUVs is $17.5K, vs. the corporate average of $10-12K. We also believe GM should benefit in 2026 from lower warranty costs & regulatory credits, lean inventory levels, and low incentives.”
- “GM is the number 1 automaker by market share in the US (17.1% retail share, including medium/heavy duty trucks), which has improved 110bps over the past three years and should continue given benefits from a more favorable environment for ICE vehicles.”
Tesla gets “buy” rating and $460 price target, a 14% upside from March 4 opening price
- “We expect TSLA to quickly become a leader in robotaxi services, given its ability to scale more profitably than competitors. We see autonomous vehicles spurring the next era of mobility and as the most significant change agent in the Auto 2.0 landscape, offering consumers the prospect of saving time, safer travel, and more accessible transportation.”
- “We expect Tesla to quickly scale its Robotaxis, which now operate in San Francisco and Austin, with 7 additional markets expected in 1H26. The standard technology used in the autonomous industry is multi‑sensor fusion (LiDAR/radar/cameras), whereas Tesla’s camera‑only approach is technically more challenging but much cheaper and leverages a consumer‑fleet data engine. Tesla’s strategy should allow it to scale more profitably than Robotaxi competitors, while its driver shortage gives it a cost advantage vs. rideshare players. We estimate Robotaxi accounts for ~52% of TSLA’s valuation.”
Related: $50,000 average new car prices are here to stay
