Tesla bumps up Model Y price after EV tax credit adjustment

On Friday, the Treasury Division up to date the way in which it classifies automobiles that qualify for its $7,500 EV tax credit score as a part of the Inflation Discount Act (IRA). The change ought to enable extra automobiles — together with the Mannequin Y — to qualify for the credit score, because it not places sure SUV crossovers in the identical class as sedans.

Beforehand, some fashions of the Mannequin Y, alongside the Cadillac Lyriq, weren’t eligible for the EV tax credit score as a result of their sticker costs exceeded the utmost $55,000 advised retail value for sedans.

However now that the federal government makes use of the Environmental Safety Company’s (EPA) Gas Economic system Labeling commonplace as an alternative of the EPA’s company common gasoline economic system (CAFE) commonplace to categorise automobiles, the Mannequin Y and Cadillac Lyriq now fall beneath the SUV class. This offers Tesla extra wiggle room on the subject of pricing, as automobiles on this class may be priced at as much as $80,000 to qualify for the tax credit score.

It’s nonetheless unclear how the Treasury Division’s record of certified automobiles will change come March, although. That’s when the company’s anticipated to launch its steering on tips on how to apply the IRA’s strict guidelines surrounding the sourcing and manufacturing of the minerals and battery parts utilized in EVs.