Tesla slashes lease pricing on Model 3/Y, expects to lose half tax credit on 3
Hot on the heels of a price drop that makes the Model 3 the cheapest Tesla yet, Tesla has also cut the base lease pricing for Model 3 and Y by $90/month and $100/month respectively.
But the company also now says that it “expects” to lose access to half of the US $7,500 federal tax credit at year’s end, reducing that credit down to $3,750.
Tesla has continued to cut its prices throughout this year, with Model 3 getting another $1,250-$2,250 cut just last week and Model Y LR and Performance trims getting a $2K price cut.
But those price cuts throughout the year didn’t really manifest in lease pricing. Tesla has never really focused on leasing, and lease prices have always been a bit higher on a Tesla than on similarly priced EVs. Last quarter, for example, only about 5% of Tesla’s sales were leased, which is far below the industry average.
But that might be changing with a significant price cut today for Tesla’s leased vehicles.
Last week, Tesla quoted a monthly payment of $419/month for the Model 3 and $499/month for the Model Y on each base model. But today we’re seeing payments of $329/month and $399/month respectively, with the same down payment ($4,500), term (36 months), and mileage (10k/yr) as the previous prices were quoted.
Other trims have seen similar reductions of $70-$90/month off.
Tesla has now placed leasing front-and-center on the Model 3 and Model Y order pages, with the right side of the screen featuring purchase price (or Tesla’s misleading “probable savings” price), and the bottom portion quoting lease pricing, where it used to simply show the purchase price again. It is also easier to access a calculator for leasing/financing options by clicking on that bottom portion.
While Tesla’s website doesn’t state this openly, this price drop could have something to do with the way the EV tax credit works, which allows almost all of its restrictions to be bypassed by leasing vehicles. Most companies have taken advantage of this and are now passing along these lease savings to customers, but Tesla never did.
Again, we don’t know if it’s starting to do this now and passing the savings along, or if it’s still keeping those credits for itself and this lease price reduction is just reflective of the falling prices of Tesla vehicles anyway.
Tesla ‘expects’ to lose half of US tax credit on Model 3
But now it also looks like Tesla expects prices to increase at the end of the year – well, effective prices anyway, given that it now “expects” that half of the tax credit is going away for the Model 3.
The reason for this is that the Inflation Reduction Act tax credits are limited to cars with battery components and raw materials that come from the US or from a free trade partner. The restriction gets stricter each year, and it looks like Tesla thinks it won’t qualify for half of the credit with next year’s tightening of restrictions.
Tesla’s Shanghai factory has been producing Model 3s and components for Model 3s for quite some time now, having produced its 2 millionth EV last month. Some of those components include LFP batteries that make their way into Tesla’s base model vehicles and are made in China, which could be the reason for the reduction.
Before today, Tesla’s website stated on the Model 3’s order page that “reductions are likely after Dec 31.” Other models had seen the same warning at times, but currently the Model Y does not have that warning, rather saying, “Take delivery by Dec 31 for full $7,500 tax credit.”
But today Tesla has changed that warning to say: “$7,500 tax credit expected to reduce to $3,750 on Dec 31 pending federal guidance. Take delivery to guarantee full incentive.”
That said, Tesla has had a confusing history with this portion of the tax credit in the past. At first, the base Model 3 did not qualify for the full $7,500 tax credit upon the IRS’s release of battery guidance, though only a month and a half afterward, Tesla surprised by gaining access to the full credit on the base Model 3. Soon after that, it added the “reductions likely” language to its website, which it has now upgraded to “expected” for the Model 3.
Other models no longer say “reductions likely” – Model Y states, “Take delivery by Dec 31 for full $7,500 tax credit,” but doesn’t include similar language about reductions being likely or expected.
All this talk about tax credits is complicated and may not apply to every buyer, since every buyer can’t necessarily take advantage of the full credit due to the current credit being nonrefundable. But that too is changing on January 1, 2024, when the tax credit will be available upfront at the point of sale, and will then allow lower-income buyers to gain the full credit even if they don’t have enough tax liability to do so, as the IRS confirmed last week.
This might otherwise be a boon for some trying to take advantage of Tesla’s new lower prices, but with this “expected” halving of the tax credit on Tesla’s cheapest model, that news is somewhat bittersweet.
Electrek’s Take
That said, there’s always the chance that this language is just a play by Tesla to sell more cars. There are two potential reasons one might think this: First, Tesla just had a disappointing quarter and may be looking to boost sales. It seemed to know ahead of time that that quarter might be disappointing, too, given its craven limited-time FSD transfer scheme, which seemed targeted solely at boosting sales, rather than doing what’s right for customers who purchased a system several years ago that still doesn’t do what Tesla said it would do.
Second, Tesla just released the highly anticipated Model 3 Highland refresh in Europe, but that isn’t expected to come to the US until early next year. This could mean some buyers want to delay and purchase the new Model 3 with all the new features, but may be lured into buying early with Tesla dangling price drops and potential loss of tax credits in front of them.
Just like when Tesla originally added the “reductions likely” language, which we called “self-serving,” the vagueness of exactly why these credits were gained in the first place, and why they might be lost, makes it difficult to understand what the reason for the credit reduction is, and whether Tesla might just be yanking our chain. A little clarity on this would be nice from Tesla’s, uh… PR department…
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Environment
Tesla is starting to have Model Y inventory in the US again, ramps up incentives in China/Europe
Tesla is starting to replenish its Model Y inventory in the US after the design changeover, and it is ramping up incentives in China and Europe, suggesting that demand issues persist despite the new Model Y’s introduction.
After Tesla’s disastrous first quarter, shareholders attempted to blame the company’s issues on the transition to the new Model Y, which resulted in limited supply and buyers delaying their deliveries.
There’s no doubt that it impacted Tesla’s performance in Q1, but there were also other clear demand issues.
The automaker stated that it successfully resumed Model Y production to normal levels in record time. Therefore, Model Y supply can’t be blamed going forward and there are reasons to be concerned.
Earlier this month, we reported that Tesla was already able to deliver new Model Y on the same day in the US and was operating a sort of shadow inventory without actually listing new inventory Model Y.
Now, Tesla has officially started to add new inventory Model Ys in the US – confirming that it doesn’t have a backlog of orders for the updated vehicle:
It’s challenging to determine the exact number of new Model Y vehicles Tesla has in stock.
The website Tesla-Info tracks new vehicle listings in the US, but Tesla only lists configurations available in specific markets. After depleting the inventory of the older version of the Model Y in late March, Tesla is now listing 93 new Model Ys in the US:
However, for any of those listings, there could be several Model Ys in inventory, especially considering that Tesla currently has a limited number of options for the new Model Ys.
Tesla’s Model Y configurations also lists most configurations as being available today in most major US markets. This again points to Tesla having no order backlog for the brand-new vehicle.
At least, Tesla has yet to introduce incentives to sell the vehicle in the US, but it does in other markets.
We previously reported that Tesla quickly introduced 0% financing for the new Model Y in China. The incentive was initially scheduled to end this month, but Tesla has now extended it through June 30th, the end of the quarter.
Tesla is having even more issues in Europe, where its sales are crashing. The automaker is also struggling to sell some older Model Ys from its inventory.
Tesla produced about 30,000 more vehicles than it delivered in the first quarter, and it increased its inventory by $1.7 billion.
Electrek’s Take
Some people think that I’m happy to see this, but they couldn’t be more wrong. I’m just emphasizing it because recognizing the problem is the first step toward fixing it, and I want it to be fixed.
The biggest EV automaker failing is not good for EV adoption, and Tesla is going in that direction.
Tesla shareholders need to recognize that the Model Y refresh is not saving Tesla. Sales have been declining since last year, while electric vehicle (EV) sales continue to increase in most markets.
The combination of Elon Musk alienating half of Tesla’s potential customer base and Tesla’s stale lineup due to the focus on self-driving is resulting in an impossible situation for Tesla right now. Something needs to change.
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![Greenlane's flagship electric charging truck stop is now online [update]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/03/GreenlaneColton1.jpg?resize=1200,628&quality=82&strip=all&ssl=1)
Greenlane, which is rolling out a US EV charging network for big rigs, just switched on its first electric truck stop in Colton, California.
April 24, 2025: The flagship facility, at the intersection of Interstates 215 and 10, was completed eight months after breaking ground. It’s got 41 OEM-agnostic chargers with 12 pull-through lanes and CCS 400 kW dual-port chargers with liquid-cooled cables. They’re built to handle big Class 8 electric rigs with ease. Twenty-nine bobtail lanes feature CCS 180 kW chargers.
Colton offers a spacious lounge with food and drinks, a water refill station, and restrooms. There’s free wifi, mobile charging stations, and 24/7 customer support. Security includes round-the-clock on-site attendants, security cameras, gated access, and enhanced lighting. Office space is available for leasing, and there’s overnight truck and trailer parking.
It’s the first of several electric charging truck stops planned for the company’s I-15 commercial EV charging corridor. Greenlane plans to expand its network with future sites expected roughly every 60 to 90 miles in Long Beach, Barstow, and Baker, California.
Greenlane has also secured its first commercial fleet customer, fully electric truckload carrier Nevoya, which will begin operating its fleet of electric trucks out of Colton early next month. Nevoya will use the charging infrastructure and occupy on-site office space. The two companies plan to scale the partnership to include up to 100 of Nevoya’s electric trucks.
Greenlane’s flagship electric charging truck stop
March 11, 2025: Builder and developer Mortenson is constructing the commercial EV charging facility in Colton, which broke ground last September. It will include more than 40 chargers when it comes online for heavy, medium, and light-duty EVs. In its next phase, Greenlane plans to deploy solar panels and battery storage to enhance grid stability, manage peak loads, and increase energy efficiency.
Greenlane’s pull-through lane chargers will be equipped with Alpitronic CCS 400 kW dual-port chargers featuring oil-cooled cables. That means faster charging without the bulk—these cables stay lightweight and easy to handle. For bobtail charging, eFill CCS 180 kW chargers will be available, bringing smart energy management to keep fleet operations running smoothly.
To keep everything in check, ABB’s SCADA system will handle remote monitoring and breaker management, boosting reliability and efficiency. Plus, Greenlane’s sites are built with Trenwa precast cable trench, making it easier to expand EV charging infrastructure and upgrade to megawatt charging as fleet demand grows.
Greenlane’s tech launch
Greenlane, a joint venture between Daimler Truck North America, NextEra Energy, and BlackRock, also debuted its branded digital technology suite as part of its ongoing development of the I-15 Commercial EV Charging Corridor. The products will be rolled out in phases.
Greenlane’s Chief Technology Officer, Raj Jhaveri, said, “Our technology helps maximize uptime and operational efficiency by ensuring vehicles are charged efficiently and ready to meet the demands of their freight schedules.”
The tech rollout includes an app that allows drivers to check charger availability and make reservations in advance, a fleet portal that enables fleet managers and dispatchers to plan and manage routes for their electric fleets, and a new Greenlane website.
Greenlane also now has OnRamp Application Programming Interfaces (APIs) that integrate with existing fleet solutions, providing fleet managers and drivers access to optimized routes, efficient charging and refueling schedules, and related charging data and emissions savings.
Read more: Greenlane announces LA to LV charging corridor for commercial trucks
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VW’s US self-driving arm, Volkswagen ADMT (Autonomous Driving Mobility & Transport), is partnering with Uber to roll out thousands of autonomous ID. Buzz vans across the US over the next decade.
The plan kicks off in Los Angeles, with testing starting later this year and commercial rides expected to launch in 2026.
The ID. Buzz autonomous driving (AD) vans will have human operators onboard during early testing and launch phases to help fine-tune the tech and keep things safe. Each stage will only move forward once regulators give the green light.
Volkswagen’s mobility brand MOIA is supplying the vehicles and the AD software that’ll run them on Uber’s platform. It’s a full-stack approach to bringing self-driving EVs to ride-hailing, and another sign that the robotaxi race is heating up.
“Volkswagen is not just a car manufacturer – we are shaping the future of mobility, and our collaboration with Uber accelerates that vision,” said Christian Senger, CEO of Volkswagen Autonomous Mobility.
In March 2024, Volkswagen became the first vehicle manufacturer to develop a Level 4 AD service vehicle for large-scale production. Level 4 AD means the car can handle most driving situations independently in a defined area, such as a city. It can also drive alone, without passengers.
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