Tesla has increased monthly lease prices for some of its vehicles by as much as $200, following the expiration of a $7,500 U.S.federal tax credit for electric vehicles at the start of 2024. The price hikes impact popular models like the Model 3 and Model Y, effectively passing the lost incentive onto consumers who prefer to lease rather than buy.
The end of the tax credit considerably alters the financial equation for potential Tesla lessees.Previously, the credit lowered the effective cost of leasing, making Teslas more competitive with gasoline-powered vehicles.Now, with the credit gone, Tesla is adjusting lease rates to maintain profitability, impacting affordability for a segment of the market and potentially slowing EV adoption rates consequently.
According to a Reuters review of Tesla’s website, the monthly lease payment for a base Model 3 Rear-Wheel Drive increased to $449 from $399 in December. The Model Y Long range now leases for $549 per month, up from $499. These changes were first noted by Tesla owners on social media platforms like X, formerly known as Twitter.
The $7,500 tax credit was available to consumers who purchased electric vehicles manufactured in North America with battery components sourced from the United States or countries with which the U.S. has free trade agreements. Tesla and other automakers had been urging Congress to reinstate or extend the credit, but it expired on January 1st without renewal.
Tesla did not promptly respond to a request for comment. The company offers financing options, and buyers can still claim the $7,500 credit at the point of sale if they meet the eligibility requirements. However, leasing customers are not currently eligible for the direct credit, making the lease price adjustments necessary for Tesla to remain competitive.
