Part 3/10:
The Vanishing EV Credits: A Major Headwind
A significant concern for Tesla’s future profitability is the phase-out of electric vehicle (EV) tax credits. For years, these credits have been a crucial incentive, effectively boosting Tesla’s affordability and sales volume. Financial data confirms that EV credits have materially supported Tesla’s bottom line, acting as a substantial profit booster.
The bad news: these credits are no longer available, and their removal will impact Tesla’s earnings moving forward. In the upcoming quarter, the effects won’t be immediately visible, but over the next few years, expect to see a tangible decline in profit margins unless Tesla can offset this loss through other means.