As a nearly trillion-dollar company by market capitalization, everyday there’s news about Tesla (NASDAQ:TSLA) stock. However, one of the news items making the most headlines now about the electric vehicle (EV) maker is the potential upside from forthcoming changes to the U.S.’s EV tax credit.

U.S. Congress has passed the Inflation Reduction Act, and President Joe Biden is signing it into law today, Aug. 16. Among other things, this massive piece of legislation revamps America’s existing EV tax incentive. Namely, it raises the manufacturer cap, which Tesla hit long ago. Recent buyers have not qualified for the credit.

Now? That’s changing, although there are a few caveats. In fact, these caveats have resulted in a flurry of headlines, which may make it seem as if this EV maker will see little benefit from this bill. However, that’s not the case, and here’s why.

TSLA Stock and the New EV Tax Credit

It may appear that other U.S.-based automakers have the most to gain from the aforementioned EV tax credit. Many Tesla models are “priced out” of the credit. To qualify, sedans must cost less than $55,000. SUVs and trucks must cost less than $80,000.

Also, there are buyer-income restrictions. Given Tesla’s owner demographics, much of its existing buyer pool may not qualify for the credit. Congress did the most it could to structure these changes to incentivize middle class households to buy EVs. Not to become a subsidy for the upper middle class and above.

But even as it seems like Congress is throwing a bone to legacy automakers, currently ramping up their own EV efforts, the changes could still be a boon for this company and a needle-mover for TSLA stock. Not all of its vehicles will be priced out of this incentive.

Based on their current manufacturer’s suggested retail prices (MSRPs), base-level Model 3 sedans, as well as Model Y crossovers (considered SUVs), qualify. Furthermore, Tesla plans to roll out other lower-priced models in the coming years. Instead of being a wash for Tesla, this bill could actually help it in its efforts to expand its customer base.

Just One of Many Catalysts for Shares

Negative headlines notwithstanding, EV tax credit changes are a positive for TSLA stock. The market hasn’t been wrong in its bidding up of shares in recent weeks, largely due to this development.

As this new credit incentivizes middle class buyers to “go electric,” Tesla stands to benefit from the sale of its existing models that qualify, as well as from the rollout of economy cars like a hatchback model. Yet while the EV tax credit changes can help the company sustain its growth stateside, it’s not the sole thing that will keep it in “growth mode” in the years ahead.

For instance, the release of its truck models (including the Cybertruck) may help keep it in the growth fast lane. Overseas growth remains in play for the company as well. Per some reports, Tesla’s upgrades to its Shanghai “gigafactory” appear to have finished, as seen from footage of a massive batch of vehicles leaving its port.

To top things off, the company’s longer-term potential catalysts remain in motion. These include further progress with its self-driving technology, as well as with its plans to launch a fleet of robotaxis. Both could play a role in helping the company continue to level-up.

Bottom Line on TSLA Stock

Tesla stock currently earns a B rating in my Portfolio Grader. Despite headlines to the contrary, changes to EV tax credits are a big deal for the company. Said chances could help boost demand for its less expensive models and enable it to expand from beyond its roots as a niche maker of higher-end EVs. The other factors mentioned above will also help it to sustain above-average levels of growth.

In turn, enabling it to potentially sustain (and grow) its valuation. That said, as I mentioned recently, we may soon see some weakness for shares. Recent excitement for shares could calm down. Shares could also slide after the upcoming stock split later this month.

Even so, as the tax credit changes further boost the bull case for shares, there’s now more reason to include TSLA stock at the top of your EV-stock watchlist.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.