Tesla Inc shares are trading lower due to a broader market downturn in renewable energy stocks. This sell-off appears to be triggered by proposed changes to US tax incentives.
Key Points to Know
- The US Senate Finance Committee’s draft tax bill calls for a complete phase-out of solar and wind energy tax credits by 2028.
- This legislative proposal could impact Tesla’s energy division, which includes solar panels and battery storage solutions.
- The elimination of federal investment tax credits for solar and energy storage systems could significantly curb demand for Tesla’s solar and battery products.
- Recent legislative efforts to eliminate the $7,500 new-vehicle EV tax credit also cast a shadow over Tesla’s core automotive business.
Impact on Tesla
The removal of incentives could dampen overall EV demand and disadvantage Tesla compared to competitors who may still qualify for some credits in 2026. This double-whammy of reduced incentives across both its energy and automotive sectors presents a challenging policy landscape for the company.
Price Action
Tesla stock is down 3.81% to $316.57 amid selling pressure evident throughout the session. The session volume reached 66.976M shares, notably lower than the average 100-day volume of 125.970M.
How to Participate in the Market
Buying TSLA Stock
Buying shares is typically done through a brokerage account. Many platforms allow you to buy “fractional shares,” which enables you to own portions of stock without buying an entire share. For example, with Tesla trading at $315.76, $100 would buy you 0.32 shares of stock.
Betting Against the Company
To bet against a company, you’ll need access to an options trading platform or a broker who will allow you to “go short” a share of stock. You can also buy a put option or sell a call option at a strike price above where shares are currently trading, allowing you to profit from the share price decline.
Conclusion
The proposed changes to US tax incentives have led to a sell-off in renewable energy stocks, impacting Tesla’s shares. Understanding the company’s exposure to these changes and the options for participating in the market can help investors make informed decisions.