(Bloomberg) -- Tesla Inc. raised the prices of its Model Y SUV in the US 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’s 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.
Tesla Slashes Prices Up to 20% in Broad Bid to Boost Sales (3)
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.”
Wells Fargo & Co. said the price changes represented around a $290 increase to Tesla’s global average selling price.
“In our view, the small price increase does not reflect a material change in Tesla’s pricing strategy or industry-wide EV pricing dynamics,” analysts Colin Langan and Kosta Tasoulis wrote. “We estimate Tesla’s average price is still down $8,100 versus prior levels. Tesla needed the price cuts to drive demand.”
(Updates with Wells Fargo comment in final paragraph.)
©2023 Bloomberg L.P.