What happened

Shares of electric vehicle (EV) stocks scored strong gains in afternoon trading on Thursday, with luxury EV maker Lucid Group (LCID 0.41%) gaining 3.2%, battery researcher QuantumScape (QS 5.69%) tacking on 4.8%, and electric van, truck, and SUV start-up Canoo (GOEV 2.59%) ripping 18.3% higher through 1:35 p.m. ET.

Tesla is the reason, but in a curious manner.

So what

In a new report released earlier this week, Bank of America forecast that as more and more companies begin manufacturing and selling electric vehicles, Tesla's share of the EV market in the U.S. -- which hit a high of 78% in 2018, but has been sliding since (to 62% last year, then 54% earlier this year) -- will quickly erode.

By 2026, reports CNBC, BofA forecasts less than 1 in 5 EVs sold in the U.S. will bear a Tesla nameplate -- just 18%.    

And yet, while this sounds like good news for the likes of Lucid and Canoo, which both produce EVs that compete with Tesla, and for QuantumScape, whose solid-state batteries are not used by Tesla but might be used by its rivals, it isn't necessarily as good news as investors today seem to be thinking.

Continuing its report, you see, BofA opined that the center of gravity for EV manufacturing will shift away from not just Tesla, but from "newer entrants" to the car market in general -- a category that almost certainly would include companies like Lucid and Canoo. Alongside Tesla, such newer entrants command about 65% of EV sales in the U.S. today, but by 2026, BofA sees their combined share falling to just 30%.

Now what

Of course, if these companies are going to be losing share, then the question naturally arises: Who will be gaining the share that they lose? And the answer is obvious: Automotive giants such as Ford Motor Company and General Motors, who were late to start the EV race, will gain share as they shift from manufacturing combustion engine vehicles to electric vehicles.

From less than 13% EV market share today combined, says the banker, Ford and GM will rocket to 14% market share each over the next three years. Additional heavyweights -- think Stellantis, VW, Volvo, Toyota, and Hyundai -- will make up the balance of the 70% market share the banker believes will go to established, old-economy automotive giants.

Now admittedly, there is still some hope for the likes of Lucid, Canoo, and whomever QuantumScape ends up selling its batteries to. If 30% of the market goes to "newer entrants" in 2026, and Tesla accounts for just 18% of that category, that still leaves 12% of the market for newer entrants not named Tesla to fight over.

Still, even if Lucid and Canoo win places in this lucky group there's no guarantee that they'll become profitable investments. According to estimates assembled by S&P Global Market Intelligence, in 2026 Lucid will still be losing money, while Canoo will just be booking its first profit, even as Ford and GM are raking in $6.2 billion and $9.7 billion in net income, respectively.

If you're looking to buy an EV stock, therefore, on balance I suspect Ford and GM are the better bets.