The Inflation Reduction Act (IRA) could have a significant impact on the electric vehicle sector, particularly for Tesla (NASDAQ:TSLA). This was according to Morgan Stanley analysts, who noted that investors might be underestimating the potential benefits the legislation could provide to Tesla over the next few years.
Morgan Stanley analyst Adam Jonas and his team noted that Tesla has achieved cost leadership and high margins through its vertically integrated business model, technological innovation, and manufacturing expertise. While many investors expect the IRA to help the entire electric vehicle industry, the analyst and his team noted that the legislation is especially advantageous to Tesla.
“Many auto analysts believe the Inflation Reduction Act (IRA) helps lift all EV boats… that any incentive is better than no incentive. We don’t think so. Tesla can ‘harvest’ far more IRA benefits than its peers, with benefits being passed through to the customer, paying market share (not margins).
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