A Bit of Great News for Ford and GM Investors

Key Points

• The ending of the $7,500 tax credit for electric vehicles pulled forward demand into the third quarter.

• Ford and GM set up programs with their finance arms to extend the tax credit through the fourth quarter with leasing.

• The programs could give Detroit automakers a financial boost during the fourth quarter.

• 10 stocks we like better than Ford Motor Company ›

Unless you've been hiding under a rock (and some days that may seem like a solid idea), you're probably aware of the Trump administration's stance on electric vehicles (EVs). The administration has suspended the $7,500 federal tax credit for EV purchases effective Sept. 30 and rolled back a number of other EV policies. On top of that, new tariffs on imported vehicles and automotive parts have thrown uncertainty into the industry picture.

But here's a little good news for some investors: Ford Motor Company (NYSE: F) and General Motors (NYSE: GM) have figured out a mini-loophole to help extend the federal tax credit to customers in the fourth quarter.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: General Motors.

What's going on?

Ford and GM are working smarter, not harder, to extend the $7,500 federal tax incentive on EVs in the U.S. to help mitigate what was expected to be a fairly large slump following the end of the credit.

The Detroit automakers are cleverly using their finance arms to offer the incentive beyond its Sept. 30 expiration date. The way this is achieved is for Ford and GM's finance arm to make down payments on the EVs even before finding customers wanting to lease the vehicles.

"If a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they place the vehicle in service (namely, when they take possession of the vehicle), even if the vehicle is placed in service after September 30, 2025."

That's what the IRS guidance says, according to Automotive News, which confirmed the existence of these programs.

Essentially, these down payments will qualify the financing arms for the federal $7,500 tax credit on those vehicles, and from there, dealers can offer leases on those cars to retail customers per usual for several more months, with the subsidy factored into the lease rate.

These clever programs are aimed at mitigating the impact of the ending tax credit, which, to the surprise of many, has been in place for more than 15 years, trying to push EV adoption. Further, Ford confirmed to Reuters that it was working on its program to provide customers with competitive lease payments through Ford Credit until Dec. 31, effectively extending the federal $7,500 tax credit through leasing through the fourth quarter and pushing back some of the expected upcoming EV sales slump into 2026.

For those wondering if this will impact Tesla (NASDAQ: TSLA), the answer is unclear. Tesla does indeed have its own in-house finance arm, known as Tesla Finance LLC, but it's yet to be confirmed as of this writing if Tesla developed a similar program through its finance arm -- although, because the impact for Tesla is likely to be much larger than Ford or GM's EV divisions, it's a development for investors to watch for.

What it all means

EV sales have yet to gain the traction in the U.S. market once anticipated by automakers just a few years ago, and for the most part, they're still money losers. But the only way to make these vehicles profitable is to substantially increase scale, which the loss of the $7,500 tax credit works directly against.

In a way, this is the best of both worlds for Ford and GM. On one hand, it can still drive demand for its EVs during the fourth quarter, perhaps when competitors cannot, helping build more scale and delay the eventual slowdown of EVs in the post-tax-credit era. Meanwhile, as that continues to drive fourth-quarter EV demand, as consumers shift back slightly toward internal combustion engine options, the automakers stand to benefit from sales of much more profitable vehicles in the near-term.

At the end of the day, it's just a bit of pretty good news for Ford and GM for the fourth quarter.

Should you invest $1,000 in Ford Motor Company right now?

Before you buy stock in Ford Motor Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ford Motor Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $621,976!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,150,085!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 29, 2025

Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.