Biden’s Push For Electric Vehicles Could Give Tesla A Huge Boost
Tesla saw impressive first-quarter numbers this year, but its greatest boost is still expected to come in the next few months when the Biden administration rolls out its latest initiative to get people to switch to electric vehicles (EV).
Recently, the White House announced a new infrastructure bill that looks to allocate $200 billion to the EV industry over the next eight years. Part of that plan involves the set-up of 500,000 charging stations, lent assistance to battery production, and the introduction of possible expanded tax incentives for EV consumers, all of which would offer huge sales advantages to Tesla and other EV manufacturers.
Dan Ives, a technology analyst at Wedbush, recently spoke to Yahoo Finance Live about the situation. “We are hearing from our contacts in the Beltway that $7,500 tax credit could potentially be $10,000 in terms of a credit, and that’s going to be a massive catalyst not just for Tesla, but for the EV ecosystem in the U.S.”
Considering that Tesla and General Motors have exceeded the 200,000 battery-electric vehicles threshold for federal tax incentives, consumers are no longer able to avail of the $7,500 tax credit for those units. With Biden’s new EV ambitions, that option could make a return.
Ives recently raised his rating to Outperform with a price target of $1,000. His bull case price target is $1,300, which shows his optimism for Biden’s plan.
“For the EV sector, the Street has been awaiting this day since Biden was elected into 1600 Pennsylvania Avenue back in November as the combination of a Biden Administration and a Blue Senate sets the stage for a green tidal wave in the U.S. to kick off with electric vehicles the centerpiece,” added Ives.
That said, even without the Biden administration’s help, Tesla is still booming on its own, with its Model Y and Model 3 units selling well in the first quarter. It continues to see this success in spite of the current semiconductor shortage that has caused other EV manufacturers such as Ford and General Motors to stop their production of pick-up trucks.