The Inflation Reduction Act was signed into law by Joe Biden. A plan for additional subsidies for electric cars until 2032 was finalised. The main benefit of these measures should be Tesla– be warehouse. I will go into the background in a moment.
Likewise, the share split in the ratio of 1 to 3 has now been successfully completed, which makes the Tesla share visually cheaper. This makes the Tesla stock interesting for a new group of investors. Together we will now look at all the important backgrounds. I hope you enjoy reading the latest issue!
Should investors sell immediately? Or is it worth joining Tesla?
Significant increase in production?
After the completed share split, the Tesla share has again come into focus for some analysts. DZ Bank wrote a new analysis and shared it with the market. Specifically, the target price was raised from $320 to $340 and the rating was left at “Buy”. The expert Matthias Volkert wrote in his study that the share price was made “optically slimmer” after the split. In the coming six months, the expert expects a significant increase in production, which means that the target of 50 percent growth in deliveries compared to the previous year will remain within reach.
Tesla Stock: Hold Rating
The Tesla share has also come into focus at the private bank Berenberg. In the wake of the recent 3-for-1 stock split, the price target was adjusted from $850 to $290. Likewise, the classification was left at “Hold”. According to Adrian Yanoshik’s expert opinion, Tesla’s gross margin should increase. Background: The production mix is moving away from Fremont. According to the analysts, the factory in California suffers from high labor costs and relatively outdated equipment.
Stock split completed successfully!
Tesla shares have plummeted by two-thirds! But don’t worry: the company has just carried out a share split. Such a means is often used to reduce the optical value of a stock. This makes stocks more accessible to a different group of investors, meaning small investors are more likely to access the stock. As approved at the annual general meeting in August, the group has now successfully completed the split of Tesla shares in the ratio of 1 to 3. Investors who have already invested will receive an additional 2 credits for 1 old paper. Logically, this divided the share value by 3. Most recently, the group carried out a similar capital measure in the ratio of 1 to 5 in August 2020.
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Inflation Reduction Act: It’s like Christmas!
Last week, US President Joe Biden wrote an important signature. Specifically, it concerns the so-called Inflation Reduction Act, which contains some measures regarding the promotion of renewable energy. This also includes subsidies for electric cars. The agreed measures must enter into force on January 1, 2023 and will then apply until 2032. For Tesla, this means the following: Electric cars can be supported with up to 7,500 dollars. However, the actual funding depends on complex rules.
What is decisive here is how high the proportion of local production facilities is in the manufacture of the batteries. Tesla can benefit from that. Because, as an analyst from broker CFRA reports, there would be a positive effect on sales figures. The background: Tesla is sometimes a) one of the best-selling electric cars in the US and b) the cars are largely produced locally. This qualifies Tesla for the new subsidy requirements. Current subsidies put Tesla at a disadvantage because Tesla was only able to leverage a small amount from them. But more on that at the end of today.
The analyst discount has changed!
With the stock split, the estimates and price target for Tesla shares have also changed. The stock is currently covered by 37 analysts. 21 experts continue to believe that investors should buy the stock. Additionally, there are 11 “hold” ratings on the market, resulting in 5 “sell” ratings at this time. The new average target price is $305.10 per share. If this is offset against the last closing price of $296.07, there is additional upside potential of 2.35 percent.
End of the day!
The new subsidy requirements are absolutely positive for Tesla. Previously, cars were only eligible if the company sold fewer than 200,000 cars a year. For this reason alone, Tesla cars were excluded from government subsidies. The new law could reverse the situation, because 70 percent of the electric cars sold in the United States will no longer be eligible for subsidies. A logical conclusion for Tesla would now be to move production to the USA. Because from 2024 the batteries may no longer come from the Middle Kingdom, and from 2025 not a single component. Overall, the outlook for Tesla stock has improved again. According to some analysts, risk-averse investors may take a closer look at the stock.
Should Tesla Investors Sell Immediately? Or is it worth getting started?
How will Tesla develop now? Is an entry worth it, or should investors rather sell? Find out the answers to these questions and why you should act now in the latest Tesla analysis.