Why Shares of Ford Took a U-Turn on Tuesday

Shares of Ford (NYSE: F) rebounded partly from Monday's 7% stock sell-off, gaining 3.6% through 11:10 a.m. ET this morning.

Ford stock appears to be responding to news that first emerged midday yesterday but seems to have been lost in the panicked sell-off. Ford and fellow automakers General Motors, Stellantis, and Toyota are lobbying Congress for an expansion of income tax credits tied to the purchase of electric vehicles (EVs).

Under current law, Congress allows new-car buyers to claim as much as a $7,500 federal income tax credit when they purchase an EV -- up to a point. Once an automaker has sold 200,000 EVs, tax credits for further sales begin to phase out. Ford rival GM has already hit this cap, as has Tesla, although Elon Musk went on record last year saying he no longer wants or needs subsidies from the federal government.

Source Fool.com