Tesla announced a price increase for its Model Y electric crossover in the United States following changes to the tax credit rules in the United States. Prices for the Model Y Long Range version have increased by 2 percent, while the Performance version has seen a 2.7 percent increase, according to the car brand’s official website. The Associated Press reported that the price increase was due to increased demand and changes in U.S. government rules that make more versions of the small SUV eligible for the tax credit.
Interestingly, the price increase comes three weeks after the automaker slashed prices by nearly 20% on certain versions of the Model Y, the brand’s best-selling electric car right now. The price cuts were announced by Tesla to boost sluggish demand after sales slumped amid heightened competition. Additionally, the automaker’s worst-ever stock market performance in 2022 is driving the decision, which is driven by a combination of factors. The price cut makes several versions of the Model Y eligible for electric vehicle tax credits under the U.S. Inflation Reduction Act, available until at least March of this year.
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Also, the change comes after automakers lobbied the U.S. government to change the vehicle definition to allow expensive vehicles to qualify for the maximum credit. Tesla Chief Executive Elon Musk and top company officials met with U.S. President Joe Biden last week to discuss aspects of the electric vehicle industry and broader electrification goals.
Now, Tesla is back on the road to raising prices on its vehicles after price cuts in January helped the automaker boost sales. Tesla CEO Elon Musk said a few days ago that the automaker’s order intake is by far the strongest in the company’s history. He also said that Tesla’s Model Y price increase was a response to that.
First published date: Feb 5, 2023 at 13:25pm CST