Under stricter rules that took effect on January 1, Tesla's (TSLA.US) Cybertruck is eligible for a U.S. tax credit of up to $7,500 for the first time this year, while also eliminating federal subsidy eligibility for other electric vehicles.
The Energy and Environmental Protection Agency stated that currently only 18 electric vehicles and plug-in hybrids qualify for subsidies, down from 22 last year. As part of the Inflation Reduction Act signed by President Biden, the reclassification of this credit tightened domestic procurement requirements for battery components and manufacturing raw materials.
Due to overall weakened demand for electric vehicles and the incoming President Donald Trump threatening to terminate the federal subsidy program, the number of qualifying electric vehicles has decreased.
It is understood that Tesla faced heavy selling in 2024 due to a slowdown in electric vehicle demand, but with Tesla CEO Elon Musk's strong support for Trump winning the U.S. presidential election, Tesla's stock price surged. The market bets that Tesla will benefit significantly from the relationship between Musk and Trump.
The market generally believes that the Trump administration may reduce electric vehicle tax incentives, while Tesla, with its scale advantages, is expected to gain a larger market share in a non-subsidy environment. Meanwhile, Trump's tariff policies may further enhance Tesla's competitiveness in the U.S. market, as Tesla has a relatively complete supply chain in the country.
In addition to Tesla’s four models (including the Cybertruck), electric vehicles from nine other brands also qualify, including Hyundai's Ioniq 5 and Ioniq 9, as well as sister brand Kia's EV6 and EV9.
New car buyers also face income and vehicle price restrictions that may affect their eligibility for subsidies.
According to the latest list from the U.S. government, Volkswagen's ID.4 crossover has lost the full $7,500 tax credit. Some electric and plug-in hybrid vehicles produced by Ford, Nissan, Rivian Automotive, Stellantis, and Volkswagen previously qualified for tax credits of up to $3,750, but are no longer eligible.
As news broke that the Cybertruck qualified for tax credits, the model made headlines after an explosion occurred outside the Trump Hotel in Las Vegas on Wednesday, with the incident being investigated as a potential act.
Additionally, data shows that Tesla delivered 495,570 vehicles in the fourth quarter, while analysts expected deliveries of 512,277 vehicles, breaking the historical high of 484,507 vehicles set in the same period last year. In the fourth quarter, Model 3/Model Y deliveries reached 471,930 vehicles, with analysts expecting 484,575 vehicles. According to CNBC's calculations, Tesla's total deliveries/sales for the entire year of 2024 are about 1.79 million, compared to 1.8 million deliveries the previous year.
Affected by the lower-than-expected delivery volume for the fourth quarter, Tesla's stock price fell 6% on Thursday.
