Tesla’s Price Hokey-Pokey

By Gary S. Vasilash

In January Tesla cut the price of various Model 3 and Model Y configurations by as much as 20% in the U.S. (there were also price reductions in other markets).

But after the U.S. Treasury Department adjusted its vehicle classification rules pertaining to federal tax rebates through the Inflation Reduction Act, Tesla made price adjustments—again.

This time up.

So there have been additions of as much as $1,500 to the base prices for Model Ys.

Part of this is predicated on those reversed rules.

Whereas the Model Y had been classified by the government as passenger vehicles, it (except for the three-row version) is redefined to be an SUV.

This is advantageous because the retail price cap for those looking for a rebate on an electric car was $55,000, which is pretty much an entry point for Model Ys.

SUVs, however, have a price cap of $80,000. So the Model Y pricing can go well beyond the mid $50Ks.

Presumably, Tesla figures it can do this because of the nature of its fan customer base.

Ford reduced prices on its Mach-Es in response to Tesla’s original move.

While it is unlikely that the company would make the same type of sudden increase in price of the Mach-E for the simple reason that the Ford customer wouldn’t be as financially pliable, it wouldn’t be at all surprising were there folks in Dearborn planning the means by which they can made price rises more palatable to potential customers (e.g., different trim packages).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s