Tesla made waves when it slashed prices earlier this month, but it appears the fluctuations aren’t finished. The automaker cut Model Y prices by $13,000 earlier in January but recently re-raised the price by $500.

Automotive News noticed the change. The entry-level Model Y Long Range now starts at $53,490, and buyers need to shell out an additional $1,390 for destination and $250 for an order fee. That’s not cheap, but it doesn’t run afoul of MSRP limitations in the Inflation Reduction Act, so it’s still eligible for a $7,500 tax credit – at least for now. 

Changes in tax credit rules placed different limitations on the prices of cars and other vehicles, with passenger cars having a lower price cap. Interestingly, the two-row Model Y was classified as a car, limiting its top-end price to $55,000. The three-row Model Y was classified as an SUV, raising its price limit to $80,000. In addition to price limits, upcoming rules place requirements on where minerals and other raw materials can be sourced.

The Treasury Department delayed its guidance on raw Materials Sourcing Requirements until March, making many vehicles eligible for the credit that would not qualify after that time. At the same time, Senator Joe Manchin is toying with an amendment to the IRA that would retroactively apply materials sourcing requirements and disqualify vehicles sold so far this year. If that passed, people who already bought a car might have to give up the tax credit, but the situation seems to be changing almost daily, so we’ll have to wait a few more weeks to see where things land. 

[Image: Tesla]

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