Bank of America analysts predict a slower electric vehicle (EV) wave than previously anticipated in their latest note covering the sector. While EVs and hybrids will still account for roughly 60% of new car offerings by 2028, the bank notes that this is down from 64% last year.
Bank of America cites a resurgence in internal combustion engine (ICE) vehicles, with offerings projected to nearly match EVs (112 vs 113) over the next four years. Hybrids are also gaining traction (20% of offerings), appealing to consumers seeking efficiency without a full EV commitment. This trend is influencing automakers like GM, which is now prioritizing hybrids alongside EVs.
EV penetration is also expected to be slower, reaching 25% by 2027, a one-year delay from the bank’s prior forecast. Their analysis projects US EV sales of 1.8 million in 2024, rising to 4.5 million by 2028. This translates to an EV penetration of 11% in 2024 (down from 14% forecast) and 25% in 2027 (down from 27%).
Bank of America predicts Tesla (NASDAQ:) will maintain its EV lead, bolstered by new Model 3/Y derivatives and an 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 share gainers in the evolving EV landscape.