Tesla raises prices of its Model Y SUV in the US

Tesla Inc. raised the prices of its Model Y SUV in the U.S. late Friday.

The cost of the Model Y Long Range has increased by $1,500 to $54,990, while the Model Y Performance is up $1,000 to $57,990, according to the company website.

The move comes after the Biden administration introduced measures to make more crossover SUVs qualify for the newly revamped electric vehicle tax credit. The change, announced Friday by the Treasury Department, expands the number of consumers who can take advantage of a lucrative $7,500 consumer tax credit by broadening the definition of how a sport-utility vehicle is defined.

Under the Inflation Reduction Act, SUVs costing up to $80,000 can now receive the tax credits.

Tesla had slashed prices on several of its models earlier this month to stoke demand and qualify for the credits. The Austin, Texas-based company sells its cars directly to consumers and regularly tweaks its prices. 

Chief Executive Officer Elon Musk said last week on the company’s quarterly earnings call that price cuts had led to a surge of demand, and that Tesla had “actually raised the Model Y price a little bit in response to that.” –BLOOMBERG