Ford Withdraws Tax Credit Program: Should You Hold or Fold the Stock?

Ford Motor Company F has decided to withdraw a program that would have enabled dealers to pass along a $7,500 tax credit on EV leases after the federal subsidy expired on Sept. 30, 2025, per Reuters.

Per a Ford spokesperson, the company will no longer claim the EV tax credit but will continue offering competitive lease rates currently available in the market. This move mirrors a similar decision made by General Motors Company GM a day earlier. While automakers such as Hyundai and Stellantis N.V. STLA have been providing direct cash incentives to offset the loss of the federal credit, Ford and General Motors have chosen a different path. 

Their financing divisions had planned to purchase EVs from dealer inventories, apply for the $7,500 tax credit themselves and then pass those savings to customers through more attractive lease terms. For customers interested in buying rather than leasing an EV, Ford Credit continues to provide 0% financing for up to 72 months, along with other promotional offers. 

Year to date, Ford's shares have risen 15.3%, outperforming the industry and sector. The stock also outperformed the company’s rivals, General Motors and Stellantis.

YTD Price Performance Comparison

Rising Sales, Strength in Ford Pro Unit Act as a Tailwind

Ford sold 545,522 vehicles in the United States in the third quarter of 2025, up 8.2% year over year, extending its streak to seven straight months of sales growth. Sales of pickups and vans reached 313,654 units, up 7.4% from last year. Electrified vehicles, which include hybrids, plug-ins and all-electrics, totaled 85,789 units, up 19.8% year over year, accounting for 15.7% of total sales. 

Ford will begin shipping the Explorer Tremor and F-150 Lobo in the fourth quarter. The Explorer SUV has long been a favorite among U.S. consumers and drivers worldwide, paving the way for road-oriented SUVs when such vehicles were still uncommon. Over the years, it has remained one of the top models in its segment, and given its long production run, countless Explorers are still in use today. Per Ford Authority, during the second quarter of 2025, the Explorer ranked among the most common vehicles on American roads.

The combination of Ford Pro's strong order books, increasing demand signals and the successful launch of the all-new Super Duty sets the stage for a highly promising future for the Ford Pro segment. Continued strength across all three domains — vehicles, software and physical services — bodes well. Ford’s increasing focus on software technology and services business will be a major driver. In the third quarter, Ford Pro Intelligence software subscriptions rose about 30% year over year, with 815,000 active subscribers.

Tariffs & Losses in Model e Unit to Mar Ford’s Growth

Ford has flagged an increase in its expected tariff impact for the year. In the second quarter alone, Ford incurred $800 million in tariff-related costs. It now expects a net $2 billion tariff hit for full-year 2025, up from the $1.5 billion projected previously. Initially, Ford had guided a $2.5 billion gross tariff impact, with plans to offset $1 billion through mitigation efforts. Now, it has raised its gross tariff cost forecast to $3 billion, but still expects to offset $1 billion.

The company's Model e segment continues to struggle amid stiff competition, pricing pressure and significant costs associated with new-generation EV development. After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs. The company is expected to incur huge losses in its EV business this year as well.

Valuation & Broker Ratings for F Stock

From a valuation perspective, Ford appears undervalued. Based on its price/sales ratio, the company is trading at a forward sales multiple of 0.28, way lower than the industry’s five-year average. 

 
Ford currently has an average brokerage recommendation (ABR) of 3.12 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by nine brokerage firms.  

Conclusion

Ford continues to deliver solid operational performance and market resilience. Ford’s year-to-date share gain has outpaced both its peers and the broader auto sector, supported by strong sales momentum and expanding demand in its Ford Pro commercial division. The company reported a rise in U.S. sales in the third quarter of 2025, with electrified vehicle sales jumping nearly 20% year over year. Ford Pro’s growing software subscriptions and strong order books position it for sustainable profitability. 

Despite near-term headwinds from tariffs and continued losses in its EV unit, Ford’s attractive valuation and continued focus on software-driven revenue and product launches instill confidence and make it a compelling long-term hold for investors. F carries a Zacks Rank #3 (Hold) at present. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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