Tesla reverses Model Y price cut after demand surge, Biden's expansion of electric vehicle tax credits
Entire Tesla Model Y line now qualifies for electric vehicle tax credits under the Biden administration's updated guidelines
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Tesla has reversed course on its price cuts for the Model Y after a surge in demand and after the Biden administration's decision to loosen regulations on electric vehicle tax credits.
More electric vehicles will qualify for a $7,500 tax credit under changes revealed by the federal government Friday, a move that follows pressure from auto industry lobbyists to better define the eligibility requirements.
The U.S. Treasury Department building in Washington, D.C., Jan. 19, 2023. (Saul Loeb/AFP via Getty Images / Getty Images)
"Today, the U.S. Treasury Department updated the vehicle classification standard used to determine the applicable Manufacturer Suggested Retail Price (MSRP) limitation for clean vehicle tax credits available under the Inflation Reduction Act," the Treasury announced Friday.
MORE EVs TO QUALIFY FOR TAX CREDIT FOLLOWING TREASURY CHANGES
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 288.53 | +37.09 | +14.75% |
As a result, more electric crossovers and SUVs previously not covered by the credit will qualify, the department said.
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A picture taken Sept. 5, 2020, shows a Tesla Model Y, an all-electric compact SUV, during its presentation at the Automobile Club in Budapest. (Attila Kisbenedek/AFP via Getty Images / Getty Images)
The statement continued, "To make it easier for consumers to know which vehicles qualify under the applicable MSRP cap, Treasury is updating the vehicle classification standard to use the consumer-facing EPA Fuel Economy Labeling standard, rather than the EPA CAFE standard. This change will allow crossover vehicles that share similar features to be treated consistently."
In January, Tesla slashed the price of its baseline Model Y Long Range to $53,490 and Model Y Performance to $56,990.
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Tesla (AP Photo/David Zalubowski / AP Newsroom)
Tesla is now bumping those prices up, the Detroit Free Press noted. CEO Elon Musk said last week the company would be raising the price after seeing increased demand, according to Bloomberg.
The Model Y Long Range is now priced at $54,990 and the Model Y Performance will now cost $57,990.
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Tesla Model Y electric vehicles in a lot at the Tesla Inc. Gigafactory in Gruenheide, Germany, Jan. 21, 2023. (Liesa Johannssen/Bloomberg via Getty Images / Getty Images)
All Teslas in the Model Y line are eligible for the tax credits under the Treasury's latest restrictions.
This marks the third price change for Tesla in the past month.