Tesla Stock Rises As Government Amends Tax Credit Separator EV Site Title Separator Site Title

Than Tesla (TSLA), Ford (F) and common engine (GM) electric vehicles will be eligible for a tax credit of up to $7,500 after the U.S. Treasury Department revised its vehicle classification definition on Friday. Tesla stock slid ahead of Friday’s closing bell after surging earlier in the day. TSLA is in a big rally since early January. Meanwhile, GM shares fell slightly and Ford shares fell after a missed key earnings report on Thursday.

X

Under the $430 billion Inflation Reduction Act signed into law in August, electric cars, sedans, and wagons costing up to $55,000 could qualify for the $7,500 tax credit. Additionally, sport utility vehicles (SUVs) costing up to $80,000 are also eligible for the $7,500 tax credit.

The Treasury will now use the Environmental Protection Agency’s fuel economy labeling standards. This expands the definition of SUV to include more crossovers. That would allow vehicles, such as Tesla’s Model Y, to qualify for income even when equipped with more options.

“This change will allow intersecting vehicles that share the same feature to be handled consistently,” Treasury wrote in its release. “It will also sort vehicle classifications by clean car credit with the rating shown on the vehicle’s label and on the consumer FuelEconomy.gov website.”

The Treasury Department says customers who have purchased an eligible electric vehicle since January 1 can claim the tax credit, even if the vehicle did not qualify under the previous standard.

Now, GM’s Cadillac Lyriq, Ford’s Mustang Mach-E and Tesla’s Model Y, which were previously considered cars and cost over the $55,000 limit, qualify for the EV tax credit.

Market Rebound Signals This is not another pullback; Here’s what to do now

Ford, GM make EV . conversion

The news comes when electric vehicle manufacturers lucid (LCID) and Tesla stock had strong rallies in January. And as traditional automakers that are in the early stages of becoming electric vehicle brands have begun to slash prices to better compete with industry leader Tesla.

Ford reports Big Q4 earnings missed Fifth due to “enforcement issues,” supply chain and manufacturing challenges. As a result, the company’s costs increase while the delivery volume decreases. However, Ford said it increased new car sales in the US 2% year over year in January. Leading the way are F-series trucks, Bronco SUVs and electric vehicles. Overall, Ford’s electric vehicle sales more than doubled last month on a year-over-year basis, but they’re still only a fraction of its total sales.

While, General Motors blows analyst expectations for its fourth-quarter results on Tuesday. GM also announced a $650 million investment in miners America lithium (lost) as it ramps up production of EV and lithium-based batteries. GM, Ford and Stellantis (STLA) predicts half of U.S. sales will be electric by 2030. Stellantis was formed through the merger of PSA Corporation and Fiat Chrysler in 2021.

Tesla shares extend recovery

Tesla shares rose 1% on Friday, bringing its rally since early January to about 90%. GM shares fell 0.9%, gaining more than 8% for the week. F stock fell 7.6%, heading to test support at the 200-day moving average.

Lucid, the Nasdaq 100’s biggest gainer in January, fell 2.4% on Friday.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

YOU MIGHT ALSO LIKE:

Tesla stock, which is performing at 80%, sees sales in China increase

Ford breaks down Q4 earnings results after GM rises and falls

Learn how to time the market with IBD’s ETF Market Strategy

Stock Market Today: Track market trends and the best stocks to watch

Watch our market experts spot the top stocks every morning on IBD Live