Watching Wall Street fall in love with Detroit again has a subtle humorous quality. Tesla rewrote the future in software and silicon, while Ford and General Motors were viewed by analysts as relics for the majority of the previous ten years. When March finally arrived, Bank of America took a somewhat sentimental action. It put buy ratings on all three and resumed coverage of the North American auto industry. Tesla, GM, and Ford. The same names that your uncle has spent fifteen years debating at Thanksgiving.
They are not connected by electrification or even by scale. Pricing power is what it is. These three businesses have found ways to raise their prices without losing customers in a market where nearly every other consumer category is vying for an additional dollar of margin.
The BofA analyst who made the call, Alexander Perry, cited a regulatory change under the current administration that subtly eliminates the penalty for selling cars that Americans genuinely want to purchase. SUVs and pickups. V8 body-on-frame trucks. As consumer incentives phase out and automakers have already canceled about 40% of planned EV programs while extending more than 45% of internal combustion ones, Perry predicts that EV sales will drop more than 20% in 2026. It’s not a pivot. It’s a reversal.
The cleanest example is Ford. Its share of the pickup market has increased by more than 300 basis points in the last two years, and its F-Series is still the best-selling brand in the nation. There are still rows of Super Dutys waiting on rail cars outside the company’s facilities in Louisville and Dearborn, which serves as a tiny visual reminder that demand is actual rather than hypothetical. Perry thinks Ford can increase its EBIT margin from 4.8% in 2026 to 8% in 2027, with a significant increase coming in 2027. That might be overly optimistic. However, the trajectory appears plausible.
In a sense, GM’s narrative is more subdued and impressive. Last year, its market share in the United States surpassed 17%, reaching its highest level since 2017. The assembly line in Lansing is operating at nearly maximum capacity. SUVs and trucks are selling for prices that five years ago would have seemed unattainable. BofA’s $105 target is based on a 3.5x multiple of 2027 EBITDA; if the truck cycle continues, this is a reasonable assumption rather than a heroic one.
Naturally, Tesla has a different strategy. Perry’s argument is based on autonomy. He contends that the company’s point-to-point software is still the most cutting-edge consumer solution on the market and that the robotaxi opportunity is finally moving from “can it work” to “how fast can it scale.” Skepticism persists, and rightfully so. The economics of Robotaxi are unproven. The competition is getting closer. However, it’s difficult to ignore Tesla’s leadership in vertically integrated AI hardware.
The fact that all three of them are winning in the same manner isn’t what makes them intriguing. It’s that each has sufficient control over its own pricing, whether it be through technology, brand, or product mix, to withstand a market still shaken by tariffs, rate uncertainty, and the aftermath of the EV gold rush. The number of miles driven is at an all-time high. Nowadays, the average car on American roads is 12.8 years old. They must be replaced by something.
It’s difficult to ignore how frequently Wall Street’s most audacious decisions end up being those that merely rely on the obvious. Perhaps that’s the case here. Or perhaps the obvious will finally pay off in 2026.
