Ford and GM Stocks Jump—Is the Auto Rebound Real?

Key Points

• U.S. automakers are rebounding after a turbulent start to 2025, driven by strong Q3 earnings from Ford and GM.
• GM raised its full-year guidance and showed resilience against tariffs, while Ford lowered its EBIT outlook due to operational challenges and EV-related losses.
• Despite improving fundamentals, elevated interest rates and weak consumer sentiment may continue to pressure auto sales heading into Q4.

For U.S. automakers, 2025 has been a year of constant whipsawing around various patches of adversity. A confluence of factors has left consumers wary of large purchases, and many are holding on to their cars for longer and longer.

However, Q3 earnings from two of the most significant legacy American manufacturers have raised optimism about the sector's outlook. Can U.S. automakers expand on this rebound, or is it just a brief bright spot in an industry still facing strong headwinds?

Headwinds Plagued Car Manufacturers in First Half of 2025

The auto industry spent the early part of 2025 in the crosshairs of regulators and consumers alike. The uncertainty reached its pinnacle when Ford Motor Co. NYSE: F announced a suspension of full-year 2025 guidance during the company’s Q1 2025 earnings release. Some of the biggest factors negatively affecting car manufacturers included:

• Tariffs - The biggest elephant in the room was the Trump administration’s tariffs on cars made outside the United States. Legacy automakers like Ford and General Motors Co. NYSE: GM have intricate supply chains throughout North America, and tariffs on imported parts from Canada and Mexico posed a massive threat to company margins. (Ford estimated its tariff burden to be over $2.5 billion gross during its Q1 2025 earnings release.) 
• High Rates - Interest rates remain elevated, and the average rate on a five-year new car loan is still above 7.5%. This rate is down nearly 100 basis points from a year ago, but is still roughly double what car buyers would have gotten on average in 2022.
• Weak Consumer Sentiment - Consumer sentiment reached multi-year lows in the spring of 2025, with many citing tariffs and high interest rates as reasons to delay spending. It has improved somewhat since early 2025, but consumers remain mostly pessimistic about the economy as the year draws to a close.

The end of the electric vehicle tax credit and shortages of various precious metals have also weighed on the car industry, and the average price of a new vehicle exceeded $50,000 for the first time in September.

But despite these pessimism-inspiring factors, Q3 earnings from both GM and Ford surpassed analyst expectations, and the return of sales growth (plus mild valuations) is putting these stocks back on investors’ radar.

GM and Ford Posted Solid Q3 Beats, But Varied Guidance

Both GM and Ford posted outstanding Q3 earnings that soared above expectations, but the conference calls offered additional color on somewhat differing outlooks for the two automotive giants.

GM’s Optimistic Guidance Raise

GM released Q3 2025 results on Oct. 21, and it's not hard to see why the stock rallied double-digits afterward.

Despite a slight year-over-year (YOY) sales decline, the company blew past expectations on both earnings per share (EPS) and revenue, and raised full-year earnings guidance to a range of $9.75 to $10.50 per share.

Executives also anticipate that tariff mitigation strategies and offsets will help reduce their 2026 burden below what they paid in 2025, despite Q1 2025 tariff rates being drastically lower.

Their improved outlook highlights growing investor confidence in the company’s operational and strategic trajectory.

Ford’s Cautious Approach

Ford also posted an EPS and revenue beat during its Q3 2025 earnings presentation on Oct. 23, but executives had a more sour outlook than their peers at GM. Tariff mitigation was a source of strength in the report, and the company now expects its burden to be about $1 billion, approximately half of what it anticipated a few quarters ago.

But Ford is facing more than tariff headwinds—the company will need to eat a free cash flow charge of up to $3 billion for the Novelis aluminum plant fire, and its first-generation EV Model is now on pace to lose $3.6 billion in 2025.

These headwinds prompted management to lower earnings before interest and taxes guidance to $6-$6.5 billion, down from $8 billion.

Both companies have reduced focus on their EV divisions now that the federal tax credit has expired, instead pivoting to hybrid models and tried-and-true trucks and SUVs.

But despite improved earnings, the car industry isn’t in the clear just yet. 

Analysis from SP Global predicts a moderate slowdown in car buying in Q4, as the EV tax credit expiration boosted Q3 sales and high prices and rates will continue to burden prospective buyers.

Charts Show Bullish Long-Term Price Action With Potential Short-Term Volatility

GM and Ford both appear to have strong upward momentum on the long-term trend, but the earnings beats generated outsized gains that may have pushed shares higher than they could sustain.

GM gained nearly 15% following its earnings release, pushing the stock to a new all-time high. But the Relative Strength Index (RSI) has been trading above 70 for the longest stretch in over a year, hinting that a short-term pullback might be the next move.

Ford shares show similar movement, with strong support along the 50-day simple moving average (SMA) and a breakout following Q3 earnings. Like GM, a pullback to support wouldn’t be surprising, but Ford didn’t get the same post-earnings boost, and the RSI no longer reads Overbought.

Ford is cheaper from a valuation standpoint, pays a heftier dividend, and its chart shows more short-term potential. However, GM may prove to be the better long-term play thanks to fewer financial headwinds and more promising 2026 projections.