Tesla Up 2.9% Premarket as More Vehicles Qualify for $7,500 Tax Credit
Tesla’s recent adjustments to its battery supply chain brought all of its Model 3 vehicles within the guidelines qualifying them for the $7,500 tax credit. The company’s shares climbed nearly 3% in the premarket.
Model 3 Tesla Could be Cheaper than a Toyota Camry
Tesla’s shares advanced more than 3% in premarket trading Wednesday after the world’s leading electric automaker modified its battery supply chain to make more vehicles eligible for federal US credits.
Notably, all Tesla Model 3 cars now qualify for $7,500 electric vehicle (EV) tax credits, confirmed by the Biden administration on Tuesday. Previously, two of three Model 3 versions were eligible for only half the credits. In April, new battery rules came into force, trimming the credit of the Model 3 Standard Range Rear-Wheel Drive and Long Range All-Wheel Drive to $3,750.
More specifically, the base version of the Model 3 Tesla costs $40,240, and the price may drop to $25,240 after considering the $7,500 federal US credit and another $7,500 stemming from the California tax rebate. This means that tax credits would nearly halve the price of a Model 3 vehicle and make it cheaper than a Toyota Camry, which starts at $26,320.
Earlier this year, the US Treasury Department pointed out the sourcing rules for critical minerals and key battery components car manufacturers must include in their EV batteries to ensure qualification for the full tax credit. The credits are a part of the Inflation Reduction Act (IRA) signed into law by President Joe Biden in August 2022 to boost the domestic EV battery supply chains and reduce dependence on China.
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Tesla Stock On the Rise
Besides changes in its battery supply chain, Tesla ensured more of its vehicles were eligible for US tax credits after imposing several major price cuts in 2023. In April, Elon Musk’s company trimmed the prices for some versions of its Model Y and Model 3 cars in the US in its sixth consecutive price reduction this year.
The company’s stock hit a 4-month high earlier this month, driven by a mix of factors, including the company’s major partnership with Ford Motors. As part of the deal, Ford EV owners can charge their cars at one of Tesla’s 12,000 fast charging stations across the US.
When writing, Tesla’s shares were trading at $227.82 ahead of Wednesday’s market open.
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