Tesla raises Model Y pricing following federal tax credit change
Tesla slashes Model S and X US prices by up to $10,000
It’s the second big price cut on those models this year.
Tesla
Steve Dent|@stevetdent|March 6, 2023 2:45 AM
Tesla has cut the prices of its high-end Model S and Model X electric cars by $5,000 (5.2 percent) and $10,000 (9.1 percent) respectively, according to changes in its website seen by TechCrunch.
It’s the second time this year the company has chopped prices, so the Model X has dropped $21,000 from $120,990 at the beginning of the year to just $99,990 currently. The Model S, meanwhile, has fallen from $104,990 to $89,990 since January 1st — a steep $15,000 reduction.
Neither car qualifies for Federal Tax rebates set to expire later this month, as those only apply to SUVs priced below $80,000 and cars under $55,000. Still, they’re likely to push many fence-sitters over the edge. That tracks with what CEO Elon Musk said on Tesla Investor’s Day, that “the desire for people to own a Tesla is extremely high… [but] the limiting factor is their ability to pay for a Tesla.”
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Most Model 3 and Y vehicles do qualify for the rebates, thanks to Tesla’s January price cuts on those EVs. (As a reminder, it’s a “nonrefundable” tax credit, so you’ll only benefit if you have a federal tax liability of at least $7,500.) After mid-March, however, the rules will change and many EVs that currently qualify may become ineligible.
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Tesla raises Model Y pricing following federal tax credit change
The Long Range and Performance models are now $1,000 more expensive than before.
Aranga87 via Getty Images
Igor Bonifacic|@igorbonifacic|February 4, 2023 2:59 PM
Tesla has quietly raised the price of its best-selling Model Y crossover. As of Saturday, the automaker’s US website lists the Long Range and Performance models at $54,990 and $57,990, respectively. For the former, that represents a $2,000 increase from the all-time low it hit when Tesla dramatically cut prices in the middle of January. As for the Performance variant, it’s currently $1,000 more than it was after last month’s price adjustment.
As The Wall Street Journal notes, the price hikes come after the Biden administration this past Friday modified eligibility criteria related to the $7,500 federal tax credit to treat more vehicles as SUVs rather than sedans. Before the change, it was possible to get the full $7,500 Inflation Reduction Act incentive on the five-seat Model Y, but you had to configure the vehicle in a way so that it fell under the $55,000 sedan threshold. Now, all Model Y variants, including the Performance model, fall under the $80,000 SUV ceiling.
The automaker did not say if it increased Model Y pricing in response to Friday’s announcement. Following the January price cut, Tesla CFO Zach Kirkhorn said the move was partly an effort to ensure more of the company’s cars fell under the $55,000 threshold. With the Model Y now comfortably under the $80,000 limit, Tesla has more freedom to price the vehicle as it sees fit.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission. All prices are correct at the time of publishing.
