Tesla Inc. raised costs in the US of its best-selling car, the Mannequin Y, by $1,000 after the federal government raised the ceiling on the worth of crossover electrical autos eligible for tax credit.

Tesla elevated the worth of the Mannequin Y Lengthy Vary to $54,990, and the Mannequin Y Efficiency to $57,990, a $1,000 improve every, in accordance with present and former costs posted on its web site.

It was the second improve in worth for the Mannequin Y Lengthy Vary over the previous two weeks.

The fashions stay 15 p.c and 17 p.c cheaper, respectively, than they had been earlier than Tesla slashed costs final month to stoke demand, earlier than accounting for the $7,500 tax credit score patrons now qualify to obtain.

In a reversal, the Treasury Division dominated on Friday that crossovers just like the Mannequin Y would qualify for electrical car tax credit so long as they had been priced beneath $80,000. The ceiling for vehicles, sedans and wagons is decrease at $55,000.

That represented a win for Tesla, Common Motors, Ford and different automakers that had pressed the Biden administration to loosen the car definitions within the incentive plan to make extra of their lineups eligible.

At its earlier worth, a Tesla Mannequin Y purchaser would solely have been ready so as to add about $1,000 in additional options, resembling a tow hitch, earlier than pushing the worth above the extent at which the tax incentive would apply.

Tesla reduce costs globally in January in response to slowing demand. It reduce costs for a second time in South Korea on Friday.

Chief Government Elon Musk mentioned final month that car orders had been roughly double the corporate’s output in January after the primary spherical of worth cuts. He mentioned sturdy demand had prompted the corporate to make its first small worth improve to the Mannequin Y.