- Shares of Tesla climbed Friday on news of an expanded EV tax credit and a spike in China sales.
- The Treasury Department broadened its definition of SUV, allowing more models from Tesla and other carmakers to qualify for EV tax credits.
- Meanwhile, Tesla’s sales in China jumped last month amid recent price cuts.
Tesla stock climbed on Friday on news of a wider US tax credit for electric vehicles and a sales spike in China.
Shares jumped as much as 5.7% to an intraday high of $199, continuing a rally that has seen Tesla surge 60% to date this yr.
Under the Inflation Reduction Act, SUVs can cost as much as $80,000 to qualify for EV tax credits. But cars, sedans and wagons must cost lower than $55,000.
Previously, EVs just like the Tesla’s Model Y, GM’s Cadillac Lyriq, Ford’s Mustang Mach-E and Volkswagen’s ID.4 didn’t qualify for EV credits because they fell in need of the Treasury Department’s weight requirement under its definition of an SUV.
But on Friday, Treasury broadened its definition of SUV, allowing more models from Tesla and other carmakers to qualify for EV tax credits that may reach as much as $7,500 per automobile.
Tesla CEO Elon Musk had criticized the Treasury’s prior standards, which allowed some cars that weren’t fully electric to qualify while some fully electric cars didn’t.
Meanwhile, Tesla sold 55,796 vehicles in China in January, in response to data published Friday by the China Passenger Automotive Association.
That is up 18% from December and 10% from a yr ago. The spike comes as Tesla slashed that price of cars in China last month by 6% to 13.5% on certain models. Tesla sales also remained strong despite the lunar latest yr holiday slowing consumer activity.
After slowing production in December, the corporate plans to spice up output at its Shanghai plant in the following two months as the worth cuts spur more demand, sources told Reuters.