Tesla Model Y Pricing Jumps $1,000 After Feds Reclassify EV Credit Eligibility

This is the second hike in as many weeks

  • Tesla raised its Model Y pricing by $1,000 Monday, after the U.S. Treasury Department and IRS published revised classifications for some EVs under the new tax credit scheme.
    • The Tesla Model Y, among some other models, are now eligible for the $7,500 credit as long as its MSRP remains below $80,000 (was $55,000).
  • This is the second price hike in two weeks Making the Model Y $2,000 more expensive than it was last month.
  • Both the Model Y Long Range and Performance models are still significantly cheaper than in early January 2023, before a massive 20% price drop.

Tesla Model Y prices are creeping up again, after a major 20% cut last month.

For the second time in the past couple weeks, Tesla raised Model Y pricing by $1,000 for both the Long Range and Performance models Monday.

Now, if you’re shopping for the automaker’s most popular crossover, you’ll have to budget at least $54,990. That’s $2,000 higher than last month, when Tesla slashed global pricing to entice fresh buyers. The Model Y Performance, for its part, now starts at $57,990.

2023 Tesla Model Y - interior

The move comes after the Treasury Department reclassified five specific EV models into the “SUV” category for the $7,500 tax credit. With that decision, those models (including the Model Y) are eligible for the credit as long as their MSRP remains under $80,000. Otherwise, sedans and wagons are only eligible up to a $55,000 MSRP cap. Automakers pressed the Biden administration to relax vehicle definitions to ensure more of their lineups qualify.

Even with the price jumps, the Tesla Model Y is still 15-17% less expensive than it was in early January 2023. Will the extra $1,000 have a chilling effect on Model Y demand?

Perhaps it won’t, though Tesla is well-known for frequently shifting prices across their lineup. On that basis, we may see further price hiking in the near future, and we’ll make sure to bring you up to speed if that happens.