Tesla is considering a price increase for its top-selling Model Y in the United States as customers scramble to lock in orders ahead of the looming expiration of the US$7,500 federal electric vehicle (EV) tax credit on September 30.
Raj Jegannathan, Tesla’s recently appointed head of sales operations, hinted at the move in a post on X, saying demand is forcing the company to accelerate production output. “Trending toward a need to expedite output even further, which could mean adjusting pricing upward in the coming days. Trying hard not to, will see,” he wrote.
The Model Y currently starts at US$44,990 for the Rear-Wheel Drive (RWD) variant, and US$48,990 for the Long Range variant, not including the US$7,500 tax credit.
Jegannathan, who has been with Tesla for nearly 13 years in IT, AI, and infrastructure roles, was elevated to lead sales earlier this year. His comments come shortly after Tesla raised prices on other models, including the Cybertruck’s high-end Cyberbeast, which jumped from US$99,990 to US$114,990 with the addition of a new “Luxe Package.”
Trending toward a need to expedite output even further, which could mean adjusting pricing upward in the coming days. Trying hard not to, will see.
— Raj Jegannathan (@r_jegaa) August 25, 2025
Inventory Shortages Signal Strong Demand
Signs of tightening supply are already evident across the country. In most major markets there are either none, or a very limited number of Model Y vehicles remaining in stock. Tesla’s website also now carries a banner urging shoppers to “Take Delivery Now,” highlighting the limited availability.
The shortage coincides with heightened buyer urgency to capture the tax savings before they disappear. The incentive has been a major factor in increasing EV adoption in the U.S., saving thousands of dollars off the purchase price of Tesla’s most popular SUV.
IRS Clarifies Rules Ahead of September Deadline
The Internal Revenue Service recently updated its guidance, offering consumers more flexibility. Buyers can still qualify for the US$7,500 new clean vehicle credit, the US$4,000 used EV credit, or the US$7,500 commercial EV credit if they enter into a binding purchase contract and provide a deposit or trade-in before September 30—even if delivery happens afterward.
This adjustment is expected to fuel even more last-minute orders, adding to Tesla’s already tight supply chain and increasing the likelihood of a near-term price hike.
For Tesla, the Model Y’s dwindling inventory could help set the stage for one of its strongest quarters in terms of deliveries, but also puts pressure on pricing strategies. A hike of even a few hundred dollars could encourage hesitant buyers to move quickly, though it risks deterring those already stretching to afford the vehicle.
