Tesla's Model Y gets a Budget Makeover for North American Market to Take on IRS SUV Rules

Tesla may be preparing to launch a new, cheaper version of its Model Y electric SUV. This new version of the Model Y is expected to be available in North America and will have a dual motor all-wheel-drive powertrain and a range of approximately 280 miles. This new Model Y is expected to be priced at around $62,000 but is currently only appearing in the source code of the company's online configurator, and cannot yet be purchased by consumers.

The launch of this new Model Y may be influenced by the recent changes to the federal tax credit for electric vehicles. The update from the IRS about the vehicles eligible for the new $7,500 federal credit has raised some questions about what it takes to be considered an SUV and have the $80,000 MSRP limit on an EV model to qualify for the credit. Tesla may need to make some changes to the Model Y in order to ensure that its buyers can take advantage of this credit.

In comparison to the current long-range Model Y, which has an EPA-rated range of 330 miles, this new version of the Model Y is expected to have a slightly shorter range. However, it's likely to be a popular option, especially considering the success of the cheaper rear-wheel-drive and shorter-range version of the Model Y in markets outside of North America.

It is worth noting that Tesla has previously offered a similar version of the Model Y in North America. This version of the Model Y was equipped with 4680 cells and was built at Gigafactory Texas. It had a dual motor all-wheel-drive powertrain and a range of approximately 280 miles. However, this version of the Model Y was only available to Tesla employees or as a direct offer to certain customers who had placed orders for the Model Y. It was never formally added to the company's Model Y configurator.

Now, several Tesla configurator code trackers are reporting that the company has added a new configuration of the Model Y to the backend of its configurator. This new Model Y is believed to match the previously mentioned Model Y with 4680 cells and is listed as a dual motor all-wheel-drive version. However, the timing of this update coincides with Tesla's confirmation that it is now producing enough 4680 battery cells to build over 1,000 Model Y vehicles per week.

We go more in-depth on the IRS's SUV classifications in this video below.