Electric vehicle stocks may break out from their downtrend after the U.S. Department of Treasury listed its $7,500 tax credit guidance.

The Treasury’s rules that take effect on April 18, 2023, will cut the number of vehicles that qualify for the EV tax credit.

Many more electric vehicle stocks may decline from here. Customers will revise their purchasing decisions based on the models that qualify for the full credit.

A pair of American vehicle companies that are developing their EV program will benefit. Companies that lose access to the $7,500 credit will include Volkswagen (OTCMKTS:VLKAF), BMW (OTCMKTS:BMWYY), Rivian (NASDAQ:RIVN), and Hyundai (OTCMKTS:HYMTF).

The proposed guidance alters the EV investing strategy. It aligns with the government’s Inflation Reduction Act, where investments of at least $45 billion will promote energy security.

Companies that sell vehicles supported by the tax credit should benefit from a boost in demand. This increases their revenue potential and profits. These are the electric vehicle stocks to buy now.

Ford Motor (F)

The F-150 Lightning truck that Ford Motor (NYSE:F) makes qualifies for the full $7,500 tax credit. The Ford E-Transit and Ford Mustang Mach-E will qualify for the smaller $3,750 credit.

Last month, Ford hiked the prices of the Lightning by $8,500 to an MSRP of $80,974, because of a supply shortage.

In Feb. 2023, it halted production due to battery fire risks. Ford said that it sold out of the 2023 Lightning Pro for retail customers.

To meet strong demand, the company announced it would invest $1.3 billion to transform its Canadian hub of electric vehicle manufacturing. This plant will build EVs and assemble battery packs. The factory currently employs 3,000 workers who build the gas-powered Ford Edge and Lincoln Nautilus.

Patient investors who buy F stock bet that the company will successfully pivot into an EV market giant. To get there, Ford needs to invest at least $50 billion in its global expansion. This includes its building a battery cell production facility in Europe.

General Motors (GM)

General Motors (NYSE:GM) will sell Chevrolet Blazer, Chevrolet Bolt, and Chevy Silverado EVs that qualify for the full $7,500 credit. This should increase demand for GM EV vehicles this year.

GM is spending 75% of its $11 billion to $13 billion in capital expenditure for EV-related projects. The timeline for the transition from internal combustion engine products to EVs is through 2035.

Investors may monitor GM’s progress in EV. In the near term, it needs to navigate through the uncertainties surrounding the semiconductor chip shortage. By 2025, GM aims to accelerate its production volume to one million vehicles.

The company has a strong balance sheet to support its EV investment. It has around $24 billion in cash on hand. It will spend about $18 billion on capital projects that transition the business primarily to the EV market.

More recently, GM Ventures and Nonoramic Laboratories announced a new agreement. GM will invest an undisclosed amount in Nonoramic to develop batteries.

These are cheaper on a per kWh measure and still deliver exceptional performance. In the future, the two firms may get the government, utility companies, and businesses to pay for such storage batteries. This will push down battery prices and lower unit prices of GM’s EV cars.

Tesla (TSLA)

Tesla (NASDAQ:TSLA) Model 3 with the standard range and real-wheel drive will qualify for the $3,700 tax credit. Its Model 3 and Model Y will both qualify for the $7,500 credit.

Last week, Tesla fell when it posted a weaker margin and free cash flow. Chief Executive Officer Elon Musk said that the company expects its vehicles will generate significant profit through autonomy.

In the near term, revenue will rise as it plans to ship more cars at a lower margin. When Tesla achieves full autonomy, it may sell the software to customers, earning a higher profit margin.

The company continued building alpha versions of the Cybertruck for testing. It finished installing the volume production line at the Giga factory in Texas. Investors should expect that the delivery event in the third quarter may reignite investor interest in the stock.

Tesla wants investors to see it as more than an electric vehicle stock. It is increasing its business diversification with Tesla Energy. Its rise in energy storage deployment is bullish. Storage sales may become a bigger percentage of revenue.

On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.