Tesla and GM are called potential winners from the new electric vehicle legislation
SouthWorks

Wolfe Research said investors in the automobile sector need to take note of the recent passing of The Inflation Reduction Act, which the firm said stands out as far and away the most consequential development for the industry in a very long time.
Analyst Rod Lache and team believe that it has potential to affect the entire value chain, as well as significantly change the trajectory of electric vehicle adoption. Crucially, the new rules set up well for Tesla (NASDAQ:TSLA) and General Motors (GM) in particular.
"We believe that this development is still far from fully appreciated. We estimate, for example, that by 2025, the U.S. Government may be directing incentives worth $12 bn/yr towards GM and GMâs customers alone; TSLA and their customers may be receiving close to $11 bn. We would expect this to almost certainly influence OEM profitability."
Select OEMs are seen becoming more profitable in EVs vs. ICE vehicles, which is a very different view than Wolfe had just one month ago. Notably the firm also boosted its 2025 U.S. EV penetration rate forecast to 20% from 10% and the global EV penetration estimate to 22% from 17.5% vs 6.0% this year.
General Motors (GM) was given a higher price target of $50 by Wolfe and Tesla (TSLA) was upgraded to Outperform with a price target of $360 (32% upside).
Read more about the implications on the EV industry from the new legislation.
Dig into the latest TrueCar forecast for U.S. auto sales.