Beyond Tesla: Why GM and Ford Heavy ETFs Could Be Safer Bets Now?

Core Insights - Tesla's third-quarter 2025 delivery numbers increased by 7% year over year, exceeding market expectations of approximately 447,600 deliveries, largely due to a rush of buyers before the expiration of the $7,500 federal EV tax credit [1][2] - The sustainability of Tesla's growth remains uncertain, as the expiration of the EV incentive may lead to a decline in demand, with CEO Elon Musk indicating potential challenges in the upcoming quarters [2][3] Tesla's Challenges - The expiration of the federal EV subsidy is expected to create a demand cliff in North America, compounded by intense competition from Chinese EV manufacturers like BYD [3] - Tesla faces the ongoing challenge of managing expectations for its high-risk ventures, including Full Self-Driving technology and the Optimus humanoid robot [3] Investment Alternatives - Investors may find better value and stability in ETFs focused on legacy automakers such as General Motors and Ford, which have diversified operations across the entire automobile market [4][5] - Legacy automakers can leverage profitable segments like internal combustion engine vehicles and hybrids, providing a buffer against volatility in pure EV demand [5][6] - Financially, legacy automakers offer lower valuations and generally lower volatility compared to Tesla, positioning them better to handle the anticipated softening of the EV market post-subsidy [6] ETFs to Consider - Invesco S&P 500 Pure Value ETF (RPV): This fund focuses on value characteristics and includes General Motors (2.94%) and Ford Motor (2.88%) among its top holdings, with an 18.6% increase over the past six months [8] - iShares U.S. Manufacturing ETF (MADE): This fund provides exposure to U.S. manufacturing companies, including General Motors (3.84%) and Ford Motor (3.15%), with a 41% increase in the past six months [9][10] - Pacer US Cash Cows 100 ETF (COWZ): This fund targets companies with high free cash flow yields, featuring Ford (2.05%) among its top holdings, and has seen a 17.4% increase in the past six months [11]