Tesla expects to meet Inflation Reduction Act requirements for tax credits

A Tesla electrical automobile at a supercharger station in Hawthorne, California, on Aug. 9, 2022.

Patrick T. Fallon | AFP | Getty Images

Tesla CEO Elon Musk stated in the course of the firm’s third-quarter earnings name on Wednesday night that the corporate expects to absolutely meet the Inflation Reduction Act requirements that might permit shoppers to obtain tax credits on new EV purchases.

President Joe Biden signed the invoice in August after it was handed by each chambers of Congress. It contains climate-related incentives, like an up to $7,500 tax credit score for shoppers who buy an electrical automobile. To be eligible for the credit score, the automobile’s battery should meet a minimal threshold of elements sourced from the U.S. or nations with which it has a free commerce settlement.

The passage of the Inflation Reduction Act, a greater than $430 billion well being, tax and local weather bundle, is “a significant boost towards accelerating our mission,” Tesla CFO Zachary Kirkhorn instructed analysts in the course of the firm’s Q3 earnings name.

Kirkhorn added that it will additionally lead to “scaling the battery supply chain at large in the United States,” although he stated the eligibility standards for the credit score will not be absolutely clear till the Treasury Department publishes steering, probably by the top of the yr.

“We believe Tesla is very well positioned to capture a significant share of that for solar storage and also electric vehicles,” Kirkhorn stated.

Shares of Tesla have been down greater than 3% in morning buying and selling Thursday after the corporate fell in need of analysts’ income expectations for the quarter. The inventory hit a 52-week low earlier within the day.

“We’re going to go basically pedals to metal as fast as humanly possible to get to 1,000 gigawatt hours a year of production in the U.S. vertically integrated,” Musk stated.

Correction: Tesla’s third-quarter earnings name was on Wednesday night. An earlier model misstated the day.

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