Is Tesla Model 3 Still The Best Purchase After Variants Losing EV Tax Credit Next Year?
Portfolio Pulse from Anan Ashraf
Tesla Inc (NASDAQ:TSLA) announced that the Model 3 RWD and Long Range versions will not be eligible for the federal EV tax credit starting next year, while the Model 3 Performance and all Model Y versions remain eligible. The Model Y RWD will become Tesla's cheapest offering, starting at $36,490 after the tax credit. This change follows new guidance aimed at reducing Chinese content in batteries for EV tax credits. Tesla has been cutting prices on its vehicles in the U.S. since the start of 2023.
December 14, 2023 | 4:52 am
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NEUTRAL IMPACT
Tesla's Model 3 RWD and Long Range will not qualify for the federal EV tax credit next year, potentially affecting demand for these models. Model Y remains eligible, which could shift consumer preference towards it.
The loss of the tax credit for the Model 3 RWD and Long Range could negatively impact their demand as they become less financially attractive to consumers. However, the Model Y's continued eligibility could offset this by attracting those consumers to the still-eligible Model Y variants. Overall, the impact on Tesla's stock price is uncertain as it could lead to a shift in sales mix rather than a decrease in total sales.
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IMPORTANCE 70
RELEVANCE 80