It’s time for investors to buy Tesla as the Inflation Reduction Act will have a significant impact on the electric vehicle industry, according to Wolfe Research. Analyst Rod Lache upgraded shares of Tesla to outperform from peer perform, saying the electric vehicle maker and its customers may net close to $11 billion in U.S. government incentives by 2025. Meanwhile, electric vehicle makers “should become more profitable than manufacturers of [internal combustion engine] vehicles; a 180- degree reversal from current expectations” based on a clear path to cost parity. “With the passage of the IRA, Tesla’s mid-decade earnings power now appears much stronger. In fact, TSLA may be the only OEM positioned to achieve the full $7,500 Purchase Credit for the vehicles that they sell in the U.S before middecade,” Lache wrote in a Tuesday note. The analyst raised his 2023 and 2025 earnings per share estimates for the electrical vehicle maker to $7.40 and $16, up from $6.12 and $12.70, respectively. He raised the 12-month price target to $360 from $280. The new price target implies 33% upside from where Tesla shares closed on Friday at $270.21. Shares rose 1.2% in Tuesday premarket trading. Lache expects that Tesla will soon get a boost from the Inflation Reduction Act as the company will handily meet an IRA requirement to manufacture or assemble more than 50% of battery components in North America. Meanwhile, Tesla’s plants in Reno and Austin will also net the company the production tax credit starting next year, which could shave $3,400 off what it costs for a typical Tesla vehicle. “As we sat down to outline this report over the past few days, our main takeaway was clear: The Inflation Reduction Act stands out as far and away the most consequential development for the U.S. Auto Industry that we’ve seen in a very long time,” Lache wrote. “We believe that this development is still far from fully appreciated,” he added. –CNBC’s Michael Bloom contributed to this report.