Tesla Inc has raised prices on its Model Y in the US, apparently due to rising demand and changes in US government rules that make more versions of the small sports utility vehicle (SUV) eligible for tax credits.
The Austin, Texas, electric vehicle company bumped up the price of the Model Y Long Range version by about 2 percent to US$54,990 and the Performance version by about 2.7 percent to US$57,990, according to its Web site.
The moves, made on Friday, come three weeks after Tesla cut prices nearly 20 percent on some versions of the Model Y, the company’s top-selling vehicle.
Photo: REUTERS
The price cuts were made to boost sagging demand, and also to make more versions of the Model Y eligible for the US$7,500 electric vehicle tax credit in the US’ Inflation Reduction Act. The full tax credits would be available at least into next month.
On Friday, the US Department of the Treasury revised vehicle classification definitions to make more electric vehicles — including SUVs made by Tesla, Ford Motor Co and General Motors Co — eligible for the full US$7,500.
The change came after lobbying by automakers that had pressed US President Joe Biden’s administration to change vehicle definitions to allow more expensive vehicles to qualify for a maximum credit.
Tesla chief executive officer Elon Musk met with top aides to Biden last week to discuss the electric vehicle industry and the broader goals of electrification.
Under the sweeping law approved in summer of last year, pickup trucks, SUVs and vans with a sticker price up to US$80,000 qualify for electric vehicle tax credits, while new electric vehicles, sedans and wagons can only be priced up to US$55,000.
The rule had disqualified some higher-priced SUVs, such as General Motors’ Cadillac Lyriq and some versions of the Model Y, prompting complaints from Tesla and other automakers.
During Tesla’s earnings conference call last week, Musk said that the company had last month seen the strongest number of orders year-to-date in company history.
He also said the company had raised the Model Y price “a little bit in response to that.”
After Tesla’s price cuts, Ford responded by reducing the price of its Mustang Mach-E, in part to qualify for the tax credit and also to spur buyer interest.
However, crosstown rival General Motors said it had no plans to cut electric vehicle prices.
The electric vehicle tax credits are among a host of changes enacted in the Inflation Reduction Act, which the US Congress approved in August last year.
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