Tesla's tax credit policy is coming to an end, but the artificial intelligence dividend is just beginning

ForTesla (TSLA), consumers 'tendency to procrastinate is manifested in rushing to buy cars before key tax credits expire. The electric car company reported on Thursday that global deliveries were unexpectedly strong in the third quarter-with the imminent end of a $7500 U.S. federal tax credit, which appeared to reverse a previous decline in Tesla sales.
This eye-catching report also serves as a clear reminder that if the appeal and buffering effect of government subsidies are lost, Tesla and other electric vehicle manufacturers will face a more severe market environment in the future. Because Tesla was not the only one who benefited from the "last wave of sales binge" before the policy expired.
Tesla's strong third-quarter results came after car companies suchas General Motors(GM), Ford (F) and Rivian (RIVN) also performed well in electric vehicle sales. Earlier, the Republican-led Congress decided to phase out federal tax credits, prompting consumers to speed up decisions to buy electric vehicles.
Behind consumers rushing to enjoy this benefit before the tax incentives expire is the uncertainty Tesla is facing.In the first half of this year, Tesla struggled (in part due to public opposition sparked by CEO Elon Musk) and put pressure on its results, while Tesla was also trying to reposition itself as a giant in artificial intelligence (AI) and robotics.
This also explains why Tesla's share price fell even though it exceeded Wall Street's delivery expectations-although its share price is still near all-time highs.
If the criticism of Tesla stock is that "its share price is out of touch with the actual business of car sales," then the response of Tesla management and staunch supporters is that Tesla is not a traditional car company and should not be traded according to the car company's valuation logic.
Investors are closely watching production plans for Cybercab, an exclusive self-driving car that is at the heart of Tesla's robotic taxi service. Tesla plans to start mass production of the model as soon as next year, which optimistic investors believe will be a "paradigm shift" in the industry (a fundamental change in business models or technology).
Wedbush analyst Dan Ives, a well-known Tesla bull, said in a report to clients on Thursday: "In Tesla's story, artificial intelligence valuations will begin to release. We believe that Tesla's move towards artificial intelligence-driven valuation is now under way in the next six to nine months.”
However, the most noteworthy point in Tesla's "long arguments" is that even if Tesla is about to say goodbye to special tax benefits, its most optimistic performance forecasts still rely on (and may even take it for granted) another form of government support-support that could push Tesla's market value to trillions of dollars.
Ives said he expected the Trump administration to open a "fast track" for Tesla's autonomous driving project. The core logic is that the U.S. government is currently engaged in an artificial intelligence "arms race" with China. In this context, companies such as Tesla are of great value to the U.S. government. The United States 'leadership in artificial intelligence aligns the government's goals with the interests of Musk and his investors.
Nvidia CEO Huang Renxun has also raised similar geopolitical views to illustrate the importance of Nvidia's participation in competition in the China market. In addition, other Silicon Valley technology giants have also warned that strict supervision of American technology companies will instead give advantages to China companies that are not bound by regulation.
Back to Tesla's core business-car sales, which generates most of the company's revenue: For now, the sales data are positive, but it's only temporary. However, from a more macro perspective, when another larger "dividend" is coming, the termination of a special benefit seems to be less important.