Tesla stock falls below key level on loss of Model 3 tax credit; Optimus Robot has been updated

Tesla (TSLA) indicates that some Model 3s will lose their IRA tax breaks in 2024 after previously predicting they would simply be reduced from $7,500 to $3,750. Meanwhile, Tesla also provided an update late Tuesday on its humanoid robot, known as Optimus, releasing a video on X, formerly Twitter, of the second-generation robot walking, sitting and manipulating eggs with precision.

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Tesla will also perform a software update on more than 2 million vehicles after the National Highway Traffic Safety Administration determined that the electric car giant’s Autopilot system was vulnerable to abuse after reviewing 1,000 crashes. The over-the-air recall, stemming from NHTSA’s ongoing Autopilot safety investigation, affects essentially every Tesla EV sold in the U.S.

TSLA shares fell 3.2% to 229.41 on Wednesday during market action, breaking above its 50-day moving average, on Model 3 and Autopilot news. On Tuesday, TSLA stock fell 1.1% to 237.01.

Tesla appeared to change the language on its website Tuesday evening, telling customers that rear-wheel-drive Model 3 and Long Range models will not be eligible for any IRA tax credit in 2024. The electric vehicle giant cited updated regulatory guidance from the Internal Revenue Service To change. These two Model 3 models use either batteries from China or Korean batteries with Chinese materials.

Tesla gained eligibility for a full $7,500 tax credit on all Model 3 models in early June, but it never revealed how it would make the Model 3 compliant with IRA battery and major component requirements.

Meanwhile, the Tesla Cybertruck all-wheel drive option currently qualifies for the full $7,500 Inflation Reduction Act (IRA) tax credit, according to the Internal Revenue Service (IRS) website. The Cybertruck model comes under the $80,000 IRA cap with a starting price of $79,990.

Tesla Stock: Optimus Video

CEO Elon Musk recently confirmed that he views Tesla as an artificial intelligence and robotics company. However, it remains to be seen whether investors and the market care about Tesla’s Optimus humanoid robot.

Tesla’s robot was first unveiled on August 19, 2021, during the company’s AI Day event.

The video released on Tuesday claims countless improvements to humanoid robots, including fine motor skills. Musk turned to X to claim that “a lot of the engineering is done in our hands.”

“Within a year he will be able to thread a needle,” he wrote.

On September 25, the first trading day after Tesla released a video of its Optimus robot, TSLA stock fell early before ending the day up about 1%.

Tesla stock performance

TSLA stock fell below its 50-day line on Wednesday. On Tuesday, Tesla stock broke out of a test of the 50-day line, with shares also closing just above the 21-day line, a key support area over the past few weeks.

The stock is building the right side of a double-bottom base giving it a buy point of 278.98, according to Market Smith analysis. Aggressive investors can use the November 29 high of 252.75 or the trend line just below 248 as early entries.

Since the start of 2023, Tesla stock has risen about 90%, broadly outperforming the broader S&P 500 index.

Tesla stock ranks fifth in the 35-stock IBD Automotive industry group. The S&P 500 component has a Composite Rating of 81 out of the best possible 99. Tesla stock also has a 78 Relative Strength Rating and an 88 EPS Rating.

Please follow Kit Norton on X, formerly known as Twitter, @ketnorton For more coverage.

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Fed shift seen; Tesla Model 3 variants will lose the tax credit