After Expired Tax Credit, Tesla Leases Are More Expensive
Key Points:
- Tesla has raised lease prices for its lineup after the federal electric vehicle tax credit expired.
- Monthly lease payments for the Model Y SUV increased by as much as $70, while lease payments for the Model 3 sedan increased by as much as $80.
- With the federal EV tax credit, leasing companies such as Tesla were able to apply the credit to leases to allow for lower monthly payments.
With the federal electric vehicle tax credit having expired at the end of September, the market for electric vehicles in the U.S. is about to undergo some significant upheaval. Not being able to factor that $7,500 federal incentive into the purchase will undoubtedly influence some shoppers’ decisions, and it’s already influencing some manufacturers’ decisions.
The industry insiders at Automotive News are reporting that Tesla has raised lease prices on all of its vehicles. That’s not the double whammy it may first appear to be (no tax credit and higher monthly payments). Under the regulations governing the tax credit, people buying EVs may or may not have qualified for the tax credit based on a number of factors, but leased vehicles fell under a far less restrictive set of rules.
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None for Me, None for You
With the federal tax credit, leasing companies (in this case, Tesla) could claim the $7,500 credit and pass that savings along to the customer in the form of lower monthly payments. So, Tesla’s lease prices were calculated based on the company being able to claim that credit. Now that the federal program has ended, the automaker is adjusting its prices accordingly.
If you’re doing some quick mental math on $7,500 over the course of a 24- or 36-month lease, the increased monthly payments are not as jarring as you might fear. For instance, on the Model Y, prices ranged from $479 a month to $529 when the federal credit was available; now, they are between $529 and $599 per month, a difference of only $50 on the low end and $70 for a more expensive lease. Monthly payments on the Model 3 grew from between $349 and $699 to a low of $429 and a high of $759.
Still, increasing prices is never a good way to drive sales — or leasing — volume, and there are likely more than a few Tesla executives feeling anxious over this development. The automaker’s share of the U.S. EV market, once higher than 80%, has plummeted to less than 40%.
Read More Tesla News Coverage on Cars.com:
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