Tesla still poised to earn $3B in ZEV credits this year: Piper Sandler
Tesla (NASDAQ:TSLA) is still poised to earn about $3 billion in zero-emission vehicle (ZEV) credits this year despite growing concerns over policy shifts under United States President Donald Trump. This is, at least, according to Piper Sandler analyst Alex Potter, who maintained his $400 per share price target and “Overweight” rating on TSLA stock.
Tesla’s ZEV credit revenue
In a recent investor note, Potter acknowledged that Trump’s efforts to undo EV-related incentives could impact Tesla’s ZEV credit income. The analyst noted that these effects would likely not be too drastic, however, even if ZEV credits provide Tesla’s finances with a substantial boost. Last year, Tesla earned about $3.5 billion from regulatory credits, equal to nearly 100% of the company’s FY24 free cash flow, as noted in a Benzinga report.
Potter estimated that the impact of potential regulatory reversals from the Trump administration will likely not be immediate. “Tesla will still book around $3B in credits this year, followed by $2.3B in 2026,” the Piper Sandler analyst wrote.
$TSLA | ð“ðžð¬ð¥ðš (TSLA): Piper Sandler maintains ðŽð¯ðžð«ð°ðžð¢ð ð¡ð, keeps ðð“ ðšð $ðŸ’ðŸŽðŸŽ.ðŸŽðŸŽ — ‘ðˆð’ð¬ ðð¨ð ðšð¬ ððšð ðšð¬ ð˜ð¨ð® ð“ð¡ð¢ð§ð¤’
Analyst says ð«ðžð ð®ð¥ðšðð¨ð«ð² ðœð«ðžðð¢ðð¬ to remain solid in 2025; no need for ðð«ðšð¬ðð¢ðœ ðžð¬ðð¢ð¦ðšððž… pic.twitter.com/JAyCGksdEa
— Hardik Shah (@AIStockSavvy) July 21, 2025
Considering his reiterated $400 price target for Tesla stock, Potter seems to be expecting an upside of over 20% for the electric vehicle maker. It should be noted, however, that Tesla is a volatile stock by nature, so huge swings in stock price may happen even without material developments from the company.
Robotaxi developments
The Piper Sandler analyst also highlighted the progress of Tesla’s Full Self-Driving (FSD) program and Robotaxi developments as potential offsets to regulatory headwinds. Potter pointed to expanding operations in Austin and Tesla’s push to launch Robotaxi services in Phoenix and the Bay Area, pending regulatory approval.
“In our view, these favorable FSD-related developments are likely to overshadow any/all negative commentary arising from lower 2025/2026 estimates,” the analyst wrote.
In addition to rescinding ZEV programs, the Trump administration has proposed ending the $7,500 federal EV credit by September 2025 and rolling back Corporate Average Fuel Economy (CAFE) standards.
The post Tesla still poised to earn $3B in ZEV credits this year: Piper Sandler appeared first on TESLARATI.
Source: https://www.teslarati.com/tesla-3b-zev-credits-this-year-piper-sandler/
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