Tesla vehicle sales returned to the last quarter in the last quarter. Will an EV lost tax credit end up the rebound?

While analysts expected Tesla to sell around 450,000 electric vehicles in the three months ending in September, Tesla ended up providing more than 497,000 – around 100,000 more than the previous quarter and an increase of 7.5% compared to the period last year. Dan Ives, one of Tesla’s most notorious bulls, paraded an analyst’s note in the same morning, describing the figures as a “massive rebound” for Tesla – a turnaround for a company that was beaten during the first half of this year in several key markets while CEO Elon Musk tried his hand in a brief chaotic attenuation in American politics.

The key question is as follows: will it last?

After all, Tesla’s short -term sales overvoltage was closely linked to its longer -term challenge. One of the main reasons for the high sales figures, investors and analysts of Tesla noted was the temporary rush of consumers buying a VE just before the elimination of the electric vehicle tax credit of $ 7,500. This incitement – which officially ended Tuesday – was in place for 17 years and had helped reduce the price difference between electric vehicles and gas for American buyers. On Wednesday, Tesla went forward and increased the cost of renting its vehicles because its first movement reflecting the change.

The tax credits are no longer available, the modification should make a significant number on consumer demand, at least in the short term.

Tesla is well aware of this. He added risk disclosure in his latest quarterly deposits concerning the potential impact of the loss of consumer incentive as well as another now -existing sales booster, carbon compensation incentives for manufacturers. The manufacturer of electric vehicles has recognized the possibility that their withdrawal could harm Tesla’s customers’ customers and future financial returns from the company.

Musk himself also posted on the subject. “Yes, we could probably have a few difficult quarters,” he said in July on Tesla’s last call for results, in response to the question of an analyst. “I’m not saying we will do it, but we could. Q4, Q1, maybe Q2. ”

Andrew Rocco, Zacks Investment Research Actions Strategist and Tesla equity investor, said in an interview that he provided for a drop in sales for the next two quarters.

But the long -term impact can be subject to several other factors: if Tesla can absorb part of the lost credit in order to reduce prices; If it can continue to regain market share on markets such as Europe and China where its reputation has suffered in the past eight months; And if the manufacturer of electric vehicles can deliver on the deadlines it has provided for a more affordable Y model.

“If they can go out with this cheaper model … It would be a huge catalyst to help them compensate for this EV SunSing tax credit,” explains Rocco.

Last time

It is worth doing a quick history lesson when you consider how Tesla can react to the elimination of the $ 7,500 tax credit. After all, this is not the first time it does.

If you remember, when the incentive was implemented for the first time via bipartite legislation in the late 2000s, there was a ceiling: after a vehicle manufacturer sold a total of 200,000 eligible vehicles, the tax credit would eliminate slowly until it is completely eliminated. Tesla and General Motors ended up reaching this threshold, and their tax credits were divided twice twice before dissolving completely. The ceiling was removed under the law on the reduction of inflation of 2022, allowing Tesla and GM to take advantage of it again.

In 2018, Tesla sold 200,000 electric vehicles, becoming the first manufacturer of electric vehicles to strike said CAP. As a result, in January 2019, Tesla customers managed to reduce $ 3,750. To respond to the change, Tesla has deployed a price drop of $ 2,000 for the S model, the X model and the model 3 the next day, absorbing a large piece of the lost incentive.

Due to the strong margins of Tesla, Rocco stressed that Tesla could be able to do the same today if she chooses it.

So far, Tesla has not engaged in one way or another. Business has However, he undertook to publish a Tesla Y model at a lower cost later this year. Musk said the new vehicle would be “accessible to everyone” before the end of 2025.

This model cost about $ 39,990, which would be about $ 5,000 cheaper than the most affordable Y model currently available. But there was no firm price ad. Rocco said it would be “critical” for Tesla to respect the deadline for the fourth quarter of Musk.

Cost savings

It seems that all EV manufacturers are looking for potential savings at the moment that they can ultimately transmit to the customer instead of the revolving tax credit.

Chris Barman, CEO of Slate Auto, the startup which plans to start selling its customizable trucks at low cost to customers next year, said Fortune in an interview on Tuesday that there is at least one advantage to the loss of Tax credit. Since the company is no longer subject to all restrictions on the suppliers required under the law on the reduction of inflation to secure customers of the tax credit, Slate has more options for battery suppliers with which it can work. “This would give us the opportunity to achieve lower costs to the consumer in a different way,” said Barman.

That said, do not expect these cost savings to increase up to $ 7,500. Although BARMAN would not provide a specific figure, it has recognized: “It will be a significant reduction in costs, but that will not compensate for the total amount of credit itself.”

Another thing to keep in mind: there are also incentives at the level of the state, as Bartement has pointed out – with the potential more. A handful of states, including California, Colorado, Vermont and Connecticut, currently offer their residents an EV tax credit. And the States, including Pennsylvania, Minnesota and Texas, also plan to incorporate their own incentives.

Tesla, on the other hand, hopes that its imminent autonomous capacities will give the company an advantage, even if its vehicles will suddenly become more expensive for customers. Tesla should deploy the 14th iteration of its “autonomous complete” software shortly, and has already started to do it with certain influencers this week.

“Once you have reached large -scale autonomy in the second half of next year, certainly by the end of next year, I think that – I would be surprised that Tesla’s economy is not very convincing,” Musk said during the winning call in the second trimester.

So far, Wall Street does not seem also optimistic. Thursday, even after Tesla declared its strong sales figures, the shares fell by more than 5%.