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Bank of America analysts are anticipating a slower wave of electric vehicles (EV) than previously expected in their latest note covering the sector. While electric and hybrid vehicles will still account for nearly 60% of new car offerings by 2028, the bank notes that this represents a decline from 64% last year.
Bank of America notes a resurgence of internal combustion engine (ICE) vehicles, with offerings expected to nearly match those of electric vehicles (112 vs. 113) over the next four years. Hybrids are also gaining traction (20% of offerings), making them attractive to consumers looking for efficiency without fully committing to electric vehicles. This trend affects automakers such as General Motors, which now prioritizes hybrid cars alongside electric cars.
Electric vehicle penetration is also expected to be slower, reaching 25% by 2027, a one-year delay from the bank’s previous forecast. Their analysis forecasts US EV sales to reach 1.8 million in 2024, rising to 4.5 million by 2028. This translates to EV penetration of 11% in 2024 (lower than forecast of 14%) and 25% in 2027 (Down from 27%).
Bank of America expects Tesla (NASDAQ:) to maintain its EV lead, boosted by new Model 3/Y derivatives and the entry-level model. However, incumbent automakers are expected to capture a larger share of the EV market, rising from 40% currently to 65% by 2027. Bank of America highlights Stellantis, GM, Toyota and Honda as potential winners in the evolving EV landscape .
