$7.5K EV Tax Credit On Two Model 3 Versions To Be Halved Next Year: Tesla Issues Warning After Biden Administration's New Guidance
Portfolio Pulse from Anan Ashraf
Tesla Inc (NASDAQ:TSLA) announced that the $7,500 EV tax credit for two versions of its Model 3 will be reduced to $3,750 starting January 1, 2024. This follows new guidance from the Biden administration to reduce Chinese content in EV batteries. Tesla urges buyers to take delivery before the end of the quarter to secure the full credit. The updated guidance also stipulates that from 2024, EVs cannot have battery components from 'foreign entities of concern' and from 2025, no critical minerals from such entities.
December 02, 2023 | 4:48 am
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NEUTRAL IMPACT
Tesla's announcement about the EV tax credit reduction for Model 3 may lead to a short-term increase in sales as buyers rush to secure the full credit before the end of the quarter, but could potentially dampen demand starting 2024.
The immediate impact of Tesla's announcement may be an increase in sales as customers try to take advantage of the full tax credit before it's reduced. However, the reduction in the tax credit starting 2024 could lead to a decrease in demand for the affected models, potentially impacting Tesla's sales and stock price. The confidence in this analysis is high due to the direct correlation between EV incentives and consumer purchasing behavior, but it is not absolute as market conditions and other factors could influence the outcome.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100