CFRA reiterated Tesla's (NASDAQ: TSLA) strong Buy rating and raised its price target to $1,245 from $1,125, as Tesla became one of the biggest winners to benefit from the inflation bill signed by the president on August 16.
CFRA Equity Research analyst Garrett Nelson reiterated a strong Buy rating on Tesla and raised its price target to $1,245 from $1,125. The analyst raised CFRA’s estimate to $12.45 from $11.90 for 2022, to $17.25 from $16.20 for 2023, and to $20.75 from $18.75 for 2024.
Nelson indicated that he believes Tesla could be the biggest winner from the new inflation bill signed into law by President Biden on August 16, writing that it was like “Christmas in August.” Under the new law, Model Y and Model 3, which are the industry's best-selling vehicles, will be eligible for a $7,500 federal tax credit effective January 1, 2023.
Model Y took first place as the most American-made car, climbing up from third place in 2021. Just behind it is last year's winner, Tesla Model 3. Tesla continues to strengthen its position by expanding its production in the country, as well as using batteries made in the USA. This was the main reason that cars will receive a federal tax break.
Numerous other electric vehicle manufacturers do not meet the requirements. Nearly 70% of them will be ineligible for a tax credit under the new law because they are not made in the US and use materials and components from other countries. Such production does not strengthen the American economy, so the country will not encourage these automakers to sell their cars in the US.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.