Photo: Tesla
The same day that IRS changed classification rules, making all Tesla Model Y trims eligible for the $7,500 tax credit, Tesla raised the prices in the U.S. This is the second price hike following Tesla’s shocking January decision to cut prices across its entire lineup, in some cases by more than 20 percent.
Good things never last, wise men say, and this couldn’t be more true for Tesla’s price cuts. The January decision surprised everybody, not because of its timing, but because it was so radical. The Model Y saw its prices lowered by a whopping $13,000, representing 21 percent off the original price. The demand for the electric crossover immediately surged, which prompted Tesla to add $500 to the base version in a move considered rather symbolic.
Tesla has signaled that it is willing to adjust prices more actively based on demand, and many expected that current prices would not last. After the Treasury Department changed classification rules, Tesla Model Y suddenly became more enticing. If you remember, the previous classification pushed the popular five-seat Model Y versions into the “other vehicles” category, which has a $55,000 price cap. This excluded them from the list of eligible models, although the seven-seater versions still qualified.
The new rules were announced on February 3, and Tesla immediately acted on the news. Hours after the Treasury changed the classification, Tesla hiked the prices of the Model Y in the U.S. This time, the increase was more sizeable, at $1,500 for the Model Y Long Range and $1,000 for the Model Y Performance. This represents a 2.8% increase and a 1.75% increase over the previous prices.
The Tesla Model Y Long Range now starts at $54,990 (was $53,490), while the Model Y Performance costs $57,990, up from $56,990. It’s the second price hike in less than two weeks for the Model Y Long Range, after the previous increase of $500 on January 23. The Model Y is still eligible for the IRA tax credits, thanks to the new price cap of $80,000. The IRS move cleared the hurdles for Tesla to adjust the prices freely without worrying that the Model Y might not qualify for a tax credit anymore.
Despite the recent price cuts, things aren’t going as well with the Model 3. Tesla decided to further lower the price of the Model 3 RWD by $500 while keeping the price of the Model 3 Performance unchanged. The Model 3 Long Range variant, which Tesla promised would become available “in 2023,” is still not available for order. The Tesla Model 3 now starts at $43,490, or $349 per month, if you opt for the 36-month lease plan. This is $50 per month less than before, while the downpayment remained at $4,500.
Tesla has signaled that it is willing to adjust prices more actively based on demand, and many expected that current prices would not last. After the Treasury Department changed classification rules, Tesla Model Y suddenly became more enticing. If you remember, the previous classification pushed the popular five-seat Model Y versions into the “other vehicles” category, which has a $55,000 price cap. This excluded them from the list of eligible models, although the seven-seater versions still qualified.
The new rules were announced on February 3, and Tesla immediately acted on the news. Hours after the Treasury changed the classification, Tesla hiked the prices of the Model Y in the U.S. This time, the increase was more sizeable, at $1,500 for the Model Y Long Range and $1,000 for the Model Y Performance. This represents a 2.8% increase and a 1.75% increase over the previous prices.
The Tesla Model Y Long Range now starts at $54,990 (was $53,490), while the Model Y Performance costs $57,990, up from $56,990. It’s the second price hike in less than two weeks for the Model Y Long Range, after the previous increase of $500 on January 23. The Model Y is still eligible for the IRA tax credits, thanks to the new price cap of $80,000. The IRS move cleared the hurdles for Tesla to adjust the prices freely without worrying that the Model Y might not qualify for a tax credit anymore.
Despite the recent price cuts, things aren’t going as well with the Model 3. Tesla decided to further lower the price of the Model 3 RWD by $500 while keeping the price of the Model 3 Performance unchanged. The Model 3 Long Range variant, which Tesla promised would become available “in 2023,” is still not available for order. The Tesla Model 3 now starts at $43,490, or $349 per month, if you opt for the 36-month lease plan. This is $50 per month less than before, while the downpayment remained at $4,500.
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