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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Is it an electric van or a truck? The Kia PV5 might be in a class of its own. Kia’s electric van was recently spotted charging in public with an open bed, and it looks like a real truck.
Kia’s electric van morphs into a truck with an open bed
The PV5 is the first of a series of electric vans as part of Kia’s new Platform Beyond Vehicle business (PBV). Kia claims the PBVs are more than vans, they are “total mobility solutions,” equipped with Hyundai’s advanced software.
Based on the flexible new EV platform, E-GMP.S, Kia has several new variants in the pipeline, including camper vans, refrigerated trucks, luxury “Prime” models for passenger use, and an open bed model.
Kia launched the PV5 Passenger and Cargo in the UK earlier this year for business and personal use. We knew more were coming, but now we are getting a look at a new variant in public.
Although we got a brief glimpse of it earlier this month driving by in Korea, Kia’s electric van was spotted charging in public with an open bed.
The folks at HealerTV found the PV5 variant with an open bed parked in Korea, offering us a good look from all angles.
From the front, it resembles the Passenger and Cargo variants, featuring slim vertical LED headlights. However, from the side, it’s an entirely different vehicle. The truck sits low to the ground, similar to the one captured driving earlier this month.
When you look at it from the back, you can’t even tell it’s the PV5. It looks like any other cargo truck with an open bed.
The PV5 open bed measures 5,000 mm in length, 1,900 mm in width, and 2,000 mm in height, with a wheelbase of 3,000 mm. Although Kia has yet to say how big the bed will be, the reporter mentions it doesn’t look that deep, but it’s wide enough to carry a good load.
The open bed will be one of several PV5 variants that Kia plans to launch in Europe and Korea later this year, alongside the Passenger, Cargo, and Chassis Cab configurations.
In Europe, the PV5 Passenger is available with two battery pack options: 51.5 kWh or 71.2 kWh, providing WLTP ranges of 179 miles and 249 miles, respectively. The Cargo variant is rated with a WLTP range of 181 miles or 247 miles.
Kia will reveal battery specs closer to launch for the open bed variant, but claims it “has the longest driving range among compact commercial EVs in its class.”
In 2027, Kia will launch the larger PV7, followed by an even bigger PV9 in 2029. There’s also a smaller PV1 in the works, which is expected to arrive sometime next year or in 2027.
What do you think of Kia’s electric van? Will it be a game changer? With plenty of variants on the way, it has a good chance. Let us know your thoughts in the comments below.
Source: HealerTV
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Is Nissan raising the red flag? Nissan is cutting about 15% of its workforce and is now asking suppliers for more time to make payments.
Nissan starts job cuts, asks supplier to delay payments
As part of its recovery plan, Nissan announced in May that it plans to cut 20,000 jobs, or around 15% of its global workforce. It’s also closing several factories to free up cash and reduce costs.
Nissan said it will begin talks with employees at its Sunderland plant in the UK this week about voluntary retirement opportunities. The company is aiming to lay off around 250 workers.
The Sunderland plant is the largest employer in the city with around 6,000 workers and is critical piece to Nissan’s comeback. Nissan will build its next-gen electric vehicles at the facility, including the new LEAF, Juke, and Qashqai.
According to several emails and company documents (via Reuters), Nissan is also working with its suppliers to for more time to make payments.
“They could choose to be paid immediately or opt for a later payment,” Nissan said. The company explained in a statement to Reuters that it had incentivized some of its suppliers in Europe and the UK to accept more flexible payment terms, at no extra cost.
The emails show that the move would free up cash for the first quarter (April to June), similar to its request before the end of the financial year.
One employee said in an email to co-workers that Nissan was asking suppliers “again” to delay payments. The emails, viewed by Reuters, were exchanged between Nissan workers in Europe and the United Kingdom.
Nissan is taking immediate action as part of its recovery plan, aiming to turn things around, the company said in a statement.
“While we are taking these actions, we aim for sufficient liquidity to weather the costs of the turnaround actions and redeem bond maturities,” the company said.
Nissan didn’t comment on the internal discussions, but the emails did reveal it gave suppliers two options. They could either delay payments at a higher interest rate, or HSBC would make the payment, and Nissan would repay the bank with interest.
The company had 2.2 trillion yen ($15.2 billion) in cash and equivalents at the end of March, but it has around 700 billion yen ($4.9 billion) in debt that’s due later this year.
As part of Re:Nissan, the Japanese automaker’s recovery plan, Nissan looks to cut costs by 250 billion yen. By fiscal year 2026, it plans to return to profitability.
Electrek’s Take
With an aging vehicle lineup and a wave of new low-cost rivals from China, like BYD, Nissan is quickly falling behind.
Nissan is launching several new electric and hybrid vehicles over the next few years, including the next-gen LEAF, which is expected to help boost sales.
In China, the world’s largest EV market, Nissan’s first dedicated electric sedan, the N7, is off to a hot start with over 20,000 orders in 50 days.
The N7 will play a role in Nissan’s recovery efforts as it plans to export it to overseas markets. It will be one of nine new energy vehicles, including EVs and PHEVs, that Nissan plans to launch in China.
Can Nissan turn things around? Or will it continue falling behind the pack? Let us know your thoughts in the comments below.
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