Tesla Stock Soars Over 5% on EV Tax Credit Bump
- Tesla’s stock is up 5%, revisiting October highs of over $226 per share.
- Investors are celebrating a tax incentive on the Model 3 and Model Y.
- Wall Street analysts are bullish on Tesla shares, suggesting there’s more runway for gains.
Elon Musk’s net worth is on the rise again thanks to a tailwind from the government. Tesla shares climbed 5% higher today as investors celebrate the fact that customers are eligible for a tax incentive that makes owning EVs more affordable. The stock has retouched on its October high to over $226 per share.
Tesla’s Model 3 sedan is now eligible for 100% of the government’s tax subsidy of $7,500, regardless of the make of the vehicle. So in other words the rear-wheel drive vehicle as well as long-range, performance and multiple other EVs all qualify for the EV subsidy. Some of these savings also spill over into the Model Y.
It’s a big deal for consumers considering that before the rear-wheel drive version of the Tesla Model 3 was only eligible for 50% of the tax-subsidy amount. The Inflation Reduction Act has widened the net to include more Model 3 and Model Y EVs.
NEWS: The US Government has updated its webiste confirming that all new Tesla Model Y/3s sold in the US are eligible for the full $7,500 EV tax credit.
— Sawyer Merritt (@SawyerMerritt) June 6, 2023
In the state of California, qualifying consumers can ultimately purchase a Tesla EV for just over $25,000 after all the federal and state-based incentives, as pointed out by investment adviser Ross Gerber.
You can buy a new Tesla model 3 for $40,240. If you qualify based off your income, you get $7500 rebate of federal taxes and another $7500 from the California state tax rebate. That means you can get a Tesla for $25,240 today in California. INSANE! $TSLA https://t.co/zcZaylxwI3
— Ross Gerber (@GerberKawasaki) June 5, 2023
Wall Street’s Bullish on Tesla
Wall Street remains bullish on Tesla stock, including Piper Sandler. Analyst Alexander Potter has a buy rating attached to TSLA shares and a $280 price target, suggesting there’s runway for more gains to the tune of 25%.
Tesla is targeting unit sales of 1.8 million this year. Even though the stock is pricey, Potter is factoring in its future revenue streams, which is how he comes to his price target. For examples, Musk’s company is involved in solar panels and battery storage, categories that are expected to experience increasing demand this year.
In addition, Musk is focused on integrating more AI into Tesla’s business, including robot dubbed Optimus. He predicts Optimus will be the biggest long-term driver of Tesla’s value over time.
Musk’s net worth is hovering at approximately $207 billion.