Zinger Key Points
- Tesla stock is going through a harrowing time as critics and nervous investors harp on demand issues.
- The company was hoping of getting a sales lift from the government EV tax credit that becomes effective this year.
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As Tesla Inc. TSLA backers and CEO Elon Musk fume over the Internal Revenue Service, or IRS, giving short shrift to the electric vehicle maker, it appears that there is scope for setting things right with respect to the qualification norms for the EV tax credit.
What Happened: The IRS has invited the general public and other Federal agencies to comment regarding the norms for different categories of EVs to qualify for the tax credit provided under the “Inflation Reduction Act of 2022,” according to a document posted on the Federal Register, as reported by Teslarati.
The written comments are to be sent to IRS official Andres Garcia through post or by email to a specified address on or before Feb. 28, 2023, to be assured of consideration.
Musk, meanwhile, has sought help in this regard, asking his followers to comment in response to IRS' request.
Please comment on this matter https://t.co/Oip43FcVo2
— Elon Musk (@elonmusk) January 4, 2023
See Also: Best Electric Vehicle Stocks
Why It’s Important: Tesla influencers and backers have complained about the five-seat variant of the company’s best-selling all-electric Model Y vehicle not qualifying for the tax credit even as plug-in hybrids of some legacy automakers are eligible.
The IRS has put a cap of $55,000 for the five-seater Model Y vehicle, which requires an unrealistic price cut of 17% in order to qualify for the tax credit, Guggenheim analyst Ali Faghri said in a recent note.
Meanwhile, a Tesla influencer pointed out on Twitter that the Model Y is too light to qualify as an SUV for the US tax credit, apparently referring to the five-seater option.
Musk responded by calling it "bizarre" and said that Tesla is being penalized for making its SUVs too mass-efficient. In response to a tweet by another influencer regarding the same, he commented that it’s all messed up.
Price Action: According to Benzinga Pro data, Tesla closed Tuesday’s session down 12.24%, at $108.10, in reaction to its fourth-quarter deliveries miss.
Read Next: Tesla Bears Grip EV Stock Following Weak Delivery Numbers: What's Going On?
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