Tesla ( NASDAQ:TSLA )
Guggenheim has lowered its projections for Tesla ( NASDAQ:TSLA ) because the company expects a lower number of its models to be eligible for tax credits under the Inflation Reduction Act. As a result, Tesla stock declined.
On Thursday, the Internal Revenue Service (IRS) issued new standards for automobiles that qualify for the tax credit of $7,500. The price of eligible automobiles and sport utility vehicles is capped at a certain amount, and the tax credit provisions stipulate that the vehicles must have been produced in North America. The latter may have a maximum MSRP of $55 thousand, whilst the former can have an MSRP of up to $80 thousand.
Guggenheim identified the price limit as a factor that might affect Tesla stock in general and its Model Y in particular.
“To summarize, the disclosure is not favourable for TSLA since the price of the majority of Model Ys will be capped at $55,000. Because of this, only the seven-seat version of the Model Y will be eligible for the $80,000 price ceiling. While this will make the car more appealing, the company’s analysts feel it represents a tiny fraction of total sales in the United States. “We originally predicted that 60–70% of TSLA US units would qualify for EV sales credits based on current pricing. However, with updated guidance, that figure is expected to be closer to 10%–20% absent a price decrease on the Model 3 LR.”
Without a doubt, Tesla (TSLA) will continue to take advantage of the tax breaks for manufacturers that are offered ...
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