Tesla's Model Y Prices in US Increased by $1,000 After New Tax Credit Terms

Elon Musk's Tesla raised prices in the US of its best-selling vehicle, the Model Y, by $1,000 after the government raised the ceiling on the price of crossover electric vehicles eligible for tax credits.

The world's biggest electric vehicle maker increased the price of the Model Y Long Range to $54,990, and the Model Y Performance to $57,990, an increase of $1,000 each, when comparing current and previous prices posted on its website.

The models remain 15 per cent and 17 per cent cheaper, respectively, than they were before Tesla slashed prices last month to stoke demand, before accounting for the $7,500 tax credit buyers now qualify to receive.

In a reversal, the Treasury Department ruled on Friday that crossovers like the Model Y would qualify for electric vehicle tax credits as long as they were priced below $80,000. The ceiling for cars, sedans and wagons is lower at $55,000.

At its previous price, a Tesla buyer of a Model Y would only have been able to add about $1,000 in extra features, such as a tow hitch, before pushing the price above the level at which the tax incentive would apply.

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