Bloomberg first reported that Tesla raised the price of its Model Y electric vehicle (EV) just hours after the US Treasury Department altered its EV tax credit rules.
The Model Y Performance went up by $1,000 to $57,990, excluding shipping costs, while the Tesla Model Y Long Range went up by $1,500 to $54,990.
As part of the Inflation Reduction Act (IRA), the Treasury Department updated the classification of vehicles that are eligible for the $7,500 EV tax credit on Friday.
As a result of the change, certain SUV crossovers are no longer considered to be in the same category as sedans, which means that more vehicles, including the Model Y, should be eligible for the credit.
The Model Y and Cadillac Lyriq are now classified as SUVs under the Environmental Protection Agency’s (EPA) Fuel Economy Labeling standard rather than the EPA’s corporate average fuel economy (CAFE) standard.
Since vehicles in this category can be priced as high as $80,000 in order to be eligible for the tax credit, this gives Tesla more leeway when it comes to setting prices.
We witnessed last year, Tesla slashed prices across its entire lineup last month in order to boost sales and enable its five-seater Model Y to qualify for the federal tax credit.
However, the manner in which the Treasury Department’s list of qualified vehicles will be altered in March remains a mystery.
