The White House released an outline of Joe Biden's $2 trillion economic plan, in which electric vehicles would be big winners, but it's better for Tesla.
Biden's EV incentives are huge.
The update for all electric vehicle investors, and it’s especially good for Tesla (ticker: TSLA), thinks Al Root in Barron's.
Biden's EV plan intends to “create good jobs electrifying vehicles,” adding, “U.S. market share of plug-in [EV] sales is only one-third the size of the Chinese EV market. The President believes that must change.”
President Biden is proposing a $174 billion investment to help the grow the domestic supply chains so U.S. auto makers can “compete globally” in the electric vehicle market. Importantly, the plan will provide point-of-sale rebates and tax incentives to buy “American-made EVs.”
Wedbush analyst Dan Ives expects the federal tax credit to go up to $10,000. He also expects the tax credit ceiling of 200,000 per manufacturer to be phased out. That ”will restore the EV tax credits for stalwarts Tesla and [ General Motors ],” added Ives his Wednesday report.
Therefore, for example, in California there will be $13,500 EV incentives if $10,000 federal thing happens. This will make the $25k Tesla for about $11,500. And with fuel savings, the new compact affordable Model 2 will be cheaper than a Mac Pro, figuratively speaking.
Torque News Tesla reporter Daniel Cappo writes that the list of potential incentives on a Tesla $25,000 car is a long one. There are a good number of incentives that require many conditions in order to qualify for them. For example, the first incentive listed here is a California clean fuel reward. This is a $1,500 incentive, and unfortunately it only applies to residents of California. There is also a clean vehicle assistance program listed that is a $5,000 program. Another incentive is a clean cars for all grant which is worth $5,500. After you take delivery of your vehicle, there is then a clean vehicle rebate project that is $2,000.
If an individual qualified for all these incentives, they could get $14,000 or more shaved off the purchase price of a new vehicle. With all these incentives, a new Tesla Model 2 could be less than $11,000. According to many sources, the cheapest car sold in the U.S right now is the 2021 Chevrolet Spark. The Spark is priced at $14,395 for the base model LS.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.