IRS has updated its EV tax guidance to classify the Model Y as a SUV and make it quality for EV credit up to $80,000 MSRP. Mustang Mach-E also qualifies as a SUV. With this change, Tesla may have seen a surge in Model Y orders. The order rate may be exceeding production rate. In order to get ordering rate to more closely match the production rate, Tesla has increased the Model Y by $1,000. From this perspective, Tesla is not starting a pricing war with a goal to inflict harm to the EV industry. Tesla started the price reductions when inventory was increasing and order rate may haven’t gotten too low relative to production rate. Tesla could counter that trend by reducting production and reducing shifts or lower prices. Tesla’s core mission is to increase the rate of moving to a sustainable transport and fight climate change. Tesla had enough of a profit margin and had been lowering production cost and they decided to lower prices. With demand and the ordering rate now going up too quickly, they are increasing the prices. Model Y Long Range estimated delivery for a car ordered today is Mar – May 2023 or up to 3 month way. The latest prices are:
Model Y Long Range $54,990
Model Y Performance $57,990
See also: IRS Guidelines