Tesla Researcher Thinks EV Giant's 'Biggest Challenge' In Q2 Comes From One Of Its Cash Cows Due To A Tax Credit Twist
Portfolio Pulse from Anan Ashraf
Tesla Inc (NASDAQ:TSLA) faces a challenge in Q2 with expected lower demand for the Model 3 due to the federal EV tax credit eligibility, favoring the Model Y. The tax credit makes the Model Y cheaper than the Model 3 for eligible customers, potentially impacting Tesla's deliveries. Tesla's first-quarter deliveries declined by 8.5% year-on-year, marking the first drop in quarterly deliveries in four years. Despite this, CEO Elon Musk anticipates higher sales in 2024 compared to 2023.
April 30, 2024 | 8:40 am
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Tesla Inc faces a potential short-term challenge with lower demand for the Model 3, impacting Q2 deliveries due to the federal EV tax credit situation favoring the Model Y.
The federal EV tax credit eligibility criteria make the Model Y a more financially appealing option than the Model 3 for consumers, potentially reducing the demand for the Model 3. This situation, combined with Tesla's recent 8.5% drop in quarterly deliveries, could negatively impact Tesla's stock in the short term as investors may be concerned about the company's ability to maintain growth in vehicle deliveries, especially given the importance of Model 3 and Model Y sales to Tesla's overall delivery numbers.
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