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Further Reading from MarketBeat.com Ford and GM Stocks Jump—Is the Auto Rebound Real?Written by Dan Schmidt. Published 11/3/2025. 
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 across several challenges. A confluence of factors has made consumers wary of large purchases, and many are keeping their cars longer than before. Still, Q3 earnings from two of the most significant legacy American manufacturers have renewed optimism about the sector. Can U.S. automakers build on this rebound, or is it a brief bright spot in an industry still facing strong headwinds? Headwinds Plagued Car Manufacturers in First Half of 2025 The world's wealthiest individuals are making huge moves with their money.
Warren Buffett just liquidated billions of shares. Bill Gates sold 500,000 shares of Microsoft. Jeff Bezos filed to sell Amazon shares worth $4.8 billion.
What is going on? One multi-millionaire believes they are preparing for a catastrophic event. But not a crash, bank run, or recession. It's something we haven't see in America for more than a century. For the full story, click here. The auto industry spent the early part of 2025 under pressure from regulators and consumers. Uncertainty peaked when Ford Motor Co. (NYSE: F) suspended full-year 2025 guidance during its Q1 2025 earnings release. Key factors weighing on carmakers included: - Tariffs - The biggest issue was the administration's tariffs on cars and parts made outside the United States. Legacy automakers like Ford and General Motors Co. (NYSE: GM) have complex North American supply chains, and tariffs on imported parts from Canada and Mexico threatened 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%. That is down about 100 basis points from a year ago but roughly double the average rate in 2022.
- Weak Consumer Sentiment - Consumer sentiment hit multi-year lows in spring 2025, with many citing tariffs and high rates as reasons to delay purchases. Sentiment has improved somewhat since then, but consumers remain cautious as the year draws to a close.
The end of the electric vehicle tax credit and shortages of certain precious metals have also weighed on the industry, and the average price of a new vehicle exceeded $50,000 for the first time in September. Despite these headwinds, Q3 earnings from both GM and Ford beat analyst expectations, and the return of sales growth (combined with relatively mild valuations) has put these stocks back on investors' radars. GM and Ford Posted Solid Q3 Beats, But Varied Guidance Both GM and Ford delivered notable Q3 earnings beats, but the companies painted somewhat different pictures for the months ahead during their earnings calls. GM's Optimistic Guidance Raise GM reported Q3 2025 results on Oct. 21, and the strong performance explains why the stock rallied after the release. Although sales declined slightly year over year, GM exceeded expectations on both earnings per share (EPS) and revenue, and raised full-year EPS guidance to a range of $9.75 to $10.50 per share. Executives said tariff mitigation strategies and other offsets should reduce the 2026 tariff burden relative to 2025, even though Q1 2025 tariff rates were significantly lower. The improved outlook underscores growing confidence in the company's operations and strategy. Ford's Cautious Approach Ford also beat EPS and revenue expectations during its Q3 2025 earnings presentation on Oct. 23, but executives were more cautious than their peers at GM. Tariff mitigation helped—the company now expects its tariff burden to be about $1 billion, roughly half of earlier projections. But Ford faces other significant charges: a possible free cash flow hit of up to $3 billion from the Novelis aluminum plant fire, and its first-generation EV program is now on pace to lose about $3.6 billion in 2025. Those headwinds prompted management to lower guidance for earnings before interest and taxes to $6.0–$6.5 billion, down from $8 billion. Both companies have shifted focus away from earlier EV ambitions after the federal tax credit expired, favoring hybrids and core trucks and SUVs instead. Even with improved earnings, the industry isn't out of the woods. SP Global forecasts a moderate slowdown in car buying in Q4, as the EV tax credit expiration boosted Q3 sales and high prices and rates continue to pressure buyers. Charts Show Bullish Long-Term Price Action With Potential Short-Term Volatility Long-term momentum looks positive for both GM and Ford, but the outsized post-earnings gains could be followed by short-term pullbacks. GM jumped nearly 15% after its earnings release, pushing the stock to a new multi-year high. The Relative Strength Index (RSI) has traded above 70 for the longest stretch in over a year, which often signals the potential for a short-term correction. 
Ford's chart shows similar momentum, with solid support near the 50-day simple moving average (SMA) and a breakout after Q3 earnings. Unlike GM, Ford did not see the same extent of a post-earnings surge and its RSI is no longer in overbought territory. 
From a valuation perspective, Ford currently looks cheaper, pays a larger dividend, and may offer more near-term upside. GM, however, could be the stronger long-term play thanks to fewer near-term financial headwinds and brighter 2026 projections.
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