Tesla hikes price of Model Y after US alters tax credit rule

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Tesla hikes price of Model Y after US alters tax credit rule
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Tesla has raised prices on its Model Y in the U.S., apparently due to rising demand and changes in U.S. government rules that make more versions of the small SUV eligible for tax credits.

Under the sweeping law approved last summer, pickup trucks, SUVs and vans with a sticker price up to $80,000 qualify for EV tax credits, while new electric cars, sedans and wagons can only be priced up to $55,000. The rule had disqualified some higher-priced SUVs, such as GM’s Cadillac Lyriq and some versions of the Model Y, prompting complaints from Tesla and other automakers.

After Tesla's price cuts, Ford responded by reducing the price of its Mustang Mach-E, in part to qualify for the tax credit and also to spur buyer interest. But crosstown rival General Motors said it had no plans to cut EV prices. But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, has cast doubt on whether buyers can receive the full $7,500 credit.

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