BofA Names Its Top Auto Picks for 2026

Bank of America BAC -1.80% ▼ has reinstated coverage of the North American auto and auto-tech sector and named General Motors GM -1.07% ▼ , Ford F -1.54% ▼ , and Tesla TSLA -2.17% ▼ as its top automaker picks for 2026. Analyst Alexander Perry said the sector could outperform expectations this year as automakers adjust to a new regulatory environment and focus more on higher-margin gasoline vehicles.

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BofA Sees Upside for Ford and GM as EV Push Slows

Perry said traditional automakers like Ford and GM could benefit as the industry steps back from aggressive EV targets. In recent years, heavy spending on electric vehicles and strict emissions rules had weighed on profits.

Now, many automakers are putting more focus on gasoline vehicles, especially pickup trucks and larger models that usually carry higher margins. Perry said this shift could lead to higher earnings estimates for both Ford and GM.

He also noted that several companies are delaying or canceling lower-margin EV programs while extending plans for internal combustion engine vehicles. As a result, EV sales could fall more than 20% in 2026 as consumer incentives fade and automakers slow their EV rollout.

Tesla Stands Out in Autonomous Driving

While Ford and GM are BofA’s top traditional auto picks, the firm also highlighted Tesla as its top pick. Perry pointed to Tesla’s strong lead in self-driving technology and its ability to expand robotaxi services.

He said Tesla’s point-to-point driving software remains the most advanced system for consumer vehicles, even as competition in robotaxi services continues to grow.

Why BofA Is Bullish on the Auto Sector

Perry also sees several trends that could support the broader auto sector in 2026. He expects U.S. vehicle sales and North American production to rise, helped by pent-up demand after years of supply limits.

At the same time, the average age of vehicles in the U.S. is about 12.8 years, while miles driven are at record levels. Together, these trends could trigger a new vehicle replacement cycle.

Looking ahead, Perry said the industry is entering a new stage in autonomous driving. The key question is no longer whether the technology works, but how fast it can scale, with self-driving systems and robotaxi services likely to shape the next phase of the auto market.

Which Is the Best Auto Stock, According to Analysts?

Using TipRanks’ Stock Comparison Tool, we compared Tesla, GM, and Ford to see how they stack up based on Wall Street analyst price targets. The data shows that GM offers the highest upside potential. At the same time, Ford has more moderate upside, while Tesla’s average price target suggests a slight downside from current levels.

Investors can dig deeper to decide which auto stock best fits their strategy. Below is a screenshot for reference.

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