Tesla recently increased the prices of its Model Y SUV in the US.
The price increase was due to the Biden administration's change in measures that allowed more crossover SUVs to be eligible for the electric vehicle tax credit.
– Model Y Long Range: $1,500 increase to $54,990 – Model Y Performance: $1,000 increase to $57,990
The Treasury Department broadened the definition of a sport-utility vehicle to expand the number of consumers who can take advantage of the $7,500 tax credit.
Under the Inflation Reduction Act, SUVs costing up to $80,000 can now receive the credits.
Earlier this month, Tesla reduced the prices of its models to boost demand and become eligible for the credits.
Tesla sells its cars directly to consumers and frequently adjusts its prices.
According to CEO Elon Musk, the previous price cut resulted in a surge in demand and they "raised the Model Y price a little bit in response to that."