Please ensure Javascript is enabled for purposes of website accessibility

Congress May Give Tesla Buyers 400,000 More $7,000 Tax Credits

By Rich Smith - Feb 12, 2021 at 12:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

And GM could cash in, too.

Once upon a time, federal income tax credits for car buyers buying electric cars -- ranging as high as $7,500 for a single car -- helped to make Tesla (TSLA 5.14%) the success story it has become.

However, because those credits phase out as a car manufacturer approaches 200,000 units sold -- and because Tesla has been so successful selling electric cars -- it's been more than a year since a Tesla customer booked a tax credit on a Model S, Model 3, Model X, or Model Y.  

Tesla Model X with gull wings open.

Image source: Tesla.

But that could soon change.

As electric-cars enthusiast Electrek reports today, Congressional Democrats have just introduced the Growing Renewable Energy and Efficiency Now (GREEN) Act for consideration. If passed, the bill would replenish electric-car company tax credits for an additional 400,000 units. Even a company like Tesla, or General Motors (GM 2.69%), which has also already sold too many cars for its customers to benefit from the old credits, would become eligible for a new batch of tax credits on electric-car purchases.

How much money are we talking about here? Seven-thousand dollars per car for cars numbers 200,000 through 600,000 sold.

Data from GoodCarBadCar.net show that Tesla has sold 781,078 cars in the U.S. over the last five years. To not penalize the company for its success, therefore, the new law would not count the sales Tesla made prior to enactment of the new law. In other words, if the law is passed, buyers of the next 400,000 Teslas sold will have access to the $7,000 credit.

That's probably cold comfort to buyers who bought Teslas numbered 200,001 to 781,078. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$761.61 (5.14%) $37.24
General Motors Company Stock Quote
General Motors Company
GM
$38.10 (2.69%) $1.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.