Tesla Model 3 Loses Federal Bonus in the USA, Stock Price Plummets

Like France, the United States is changing eligibility criteria for bonuses based on the origin of components. Tesla is bearing the brunt.

Tesla is at a turning point in its history. Everywhere, governments are beginning to recognize the danger of Chinese automobiles. And all indirect means will be used to slow the tide.

In the United States, the Biden administration decided that starting January 1, 2024, the bonus will depend on the origin of certain strategic parts. Particularly the battery, often produced in China and now the main source of foreign dependency for the USA and Europe.

Thus, Tesla announced on Wednesday, December 13, 2023, that it would alert potential customers that the federal bonus will no longer apply to its Model 3 Propulsion and Long Range. The amount of this bonus was $7,500 (€6,950). A serious blow for the American manufacturer, whose stock price has fallen nearly 3%, and nearly 5% in five days.

The problem is even bigger now that investment banks and financial analysts have entered the scene. Currently trading at $237 (as of December 13, 2023), the stock is deemed overvalued by 38% according to Bernstein Research. According to these US trading experts, the stock should now be worth no more than $150!

If we follow this logic, Tesla’s market valuation—today at $742.66 billion—would drop by $282 billion! Considering Toyota, the world’s leading automaker, is valued at $43 billion, it becomes clear that a sharp correction could be in store for Tesla in the coming months.

Much will depend on the impact on Tesla’s US sales following the removal of the federal bonus, which competitors could significantly benefit from.

Update: On Wednesday, December 13, at 6 p.m., Tesla’s share price had fallen an additional $7, to $230.

READ ALSO: Tesla Model Y: its bonus will drop to €4160 in 2024!