Tesla, Lucid jump premarket as Inflation Reduction Act targets US-assembled EVs

On Sunday, August 7, the US Senate barely passed President Biden’s Inflation Reduction Act, intending to reduce government deficits while boosting climate-change spending, among other things. 

The measure passed on a party-line 51-50 vote and, contained the electric vehicle (EV) tax credit as part of a $400 billion funding for climate and energy-related programs over the next ten years. Furthermore, this credit will include a $7,500 EV credit, which will now be renewed in January 2023 and will last until the end of 2032. 

Another neat detail for EV manufacturers from the US is that the credit applies to vehicles assembled in North America and that materials and critical minerals in the battery must come from the US or a country with a free trade agreement with the US 

Currently, in premarket trading, both Tesla (NASDAQ: TSLA) and Lucid (NASDAQ: LCID) are rising after the agreement broke, with TSLA up 1.92% and LCID 0.61% at the time of writing. 

TSLA chart and analysis

According to technical analysis, both the long and short-term trends are positive for TSLA, with the stock trading in the $675.10 to $940.82 range over the past month.

Looking at the yearly performance, TSLA did better than 90% of all other stocks trading in the markets, despite being down over 27% year-to-date (YTD).

Currently, the support line is at $671.88, and the resistance line is at $891.46. 

TipRanks analysts rate the shares as a moderate buy, seeing the average price in the next 12 months reaching $873.97, 1.09% higher than the current trading price of $864.51.

LCID chart and analysis 

LCID is an average performer in the automobile industry, outperforming 63% of 30 stocks in the same industry, but the long-term trend is still negative. The stock is trading near the lows of its 52-week range. 

The support line is at $17.85, and the resistance zone is found in the range between $19.83 and $19.99.

Analysts on Wall Street agree that the stock is a moderate buy,’ with average price predictions for the next 12 months at $23.00, 27.42% higher than the current trading price of $18.05.

Meanwhile, there are also energy rebates for heat pumps, rooftop solar, electric HVAC, and water heaters, as the US aims to lower carbon emissions by about 40% by 2030. 

With such a push, America will play a significant role on the world stage as a champion of green energy and EVs across the globe, with the bill coming out at a reasonable time as China stopped all military and energy-related cooperation with the US last week. 

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