The stock of Tesla (TSLA 0.49%) jumped today after Canaccord analyst George Gianarikas raised his price target for the electric vehicle company's shares and after the Senate passed the Inflation Reduction Act, which could give some electric vehicle (EV) sales a boost.
The EV stock jumped by 3.7% as of 1:22 p.m. ET on Monday
Gianarikas raised his price target for Tesla's shares to $881, up from his previous price target of $815, and kept a buy rating on the stock today.
The analyst believes that Tesla has a built-in advantage over other EV makers because of the company's lead in manufacturing, its ability to procure EV materials, as well as its autonomous vehicle technology, according to TheFly.com.
Gianarikas acknowledged that there are concerns for the EV industry right now, but he believes that Tesla's current position, along with the company's moves into energy storage and solar, will help keep it ahead of its competition.
Investors were also optimistic about Tesla today after the Senate passed the Inflation Reduction Act yesterday. Among other things, the legislation extends federal tax credits of $7,500 for EVs and removes the previous tax credit cap when an automaker reaches 200,000 EVs sold.
The bill also adds a new tax credit of $4,000 for consumers who buy a used electric vehicle.
While not all of Tesla's vehicles will qualify for the credit (some are too expensive), it's possible that some consumers could still benefit when buying the company's lower-priced models.
Today's gains add to Tesla's recent share price trajectory; they have risen 22% over the past month.
While Tesla investors no doubt are celebrating these gains, they should also keep a close eye on any new data about rising inflation, a slowing economy, or an increase in EV materials costs, all of which could hurt consumer demand.