Tesla confirmed that the company expects to meet requirements for the Inflation Reduction Act (IRA), according to Teslarati.
Tesla to meet the requirements for tax credit eligibility under the IRA
During the company’s third-quarter earnings call, a shareholder asked to explain Tesla’s ability to meet the requirements for tax credit eligibility under the Inflation Reduction Act. Tesla CEO Elon Musk replied that the company expects to meet IRA requirements fully.
“Yes. We view [the] passing of the Inflation Reduction Act as a significant boost towards accelerating automation while also scaling the battery supply chain at large in the United State,” Zackary Kirkhon, Tesla’s Chief Financial Officer, elaborated.
“We expect Treasurer to publish detailed guidance by the end of the year. Until this time, it’s difficult to fully determine the eligibility criteria,” he added.
President Joe Biden signed the bill after both chambers of Congress passed it in August. It includes climate-related incentives, like up to $7,500 tax credits for consumers who buy an EV, as per CNBC.
“We believe Tesla is very well positioned to capture a significant share of that for solar storage and also electric vehicles,” said Kirkhorn.
Notably, the car’s battery must meet a minimum threshold of parts sourced from the US or countries with a free trade agreement to be eligible for the credit.
Earlier this month, the Treasurer began to seek public feedback on energy tax benefits’ regulations with the IRA.
John Podesta, a Senior White House adviser, noted that the guidance on the incentives and requirements should be available by the end of 2022. He emphasized Kirkhorn’s words during the earnings call.
Moreover, the bill includes up to $4,000 in tax credits for electric vehicle purchases and benefits of EV battery production in North America. Tesla’s 4680 battery cell looks like a good fit with the IRA.
“So, I would recommend expedited permitting would really be helpful. I think in sense fast track things that are important for the environment and humanity for sure. That seems logical. And the reception has been positive. So, we’ll see if something happens with that.” Musk stated.
The CEO shared that the company is moving quickly to achieve 1,000 GWh a year of battery production capacity within the US. He also highlighted that expedited permitting would be helpful to the sustainable energy transition.
