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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Velocity truck rental is doing its part to help commercial fleets electrify by energizing 47 high-powered charging stations at four strategic dealer locations across Southern California. And they’re doing it now.
The new Velocity Truck Rental & Leasing (VTRL) charging network isn’t some far-off goal being announced for PR purposes. The company says its new chargers are already in the ground, and set to be fully online and energized by the end of this month at at VTRL facilities in Rancho Dominguez (17), Fontana (14), the City of Industry (14), and San Diego (2).
45 120 kW Detroit e-Fill chargers make up the bulk of VTRL’s infrastructure project, while two DCFC stations from ChargePoint get them to 47. All of the chargers, however, where chosen specifically to cater to the needs of medium and heavy-duty battery electric work trucks.
The company says it chose the Detroit e-Fill commercial-grade chargers because they’ve already proven themselves in Daimler-heavy fleets with their ability to bring Class 8 Freightliner eCascadias, Class 6 and 7 Freightliner eM2 box trucks, and RIZON Class 4 and 5 cabover trucks, “to 80% state of charge in just 90 minutes or less.”
At Velocity, we are not just reacting to the shift towards electric mobility; we are at the forefront with our customers and actively shaping it. By integrating high-powered, commercial-grade charging solutions along key transit corridors, we are ensuring that our customers have the support they need today. This charging infrastructure investment is a testament to our commitment to helping our customers transition smoothly to electromobility solutions and to prepare for compliance with the Advanced Clean Fleets (ACF) regulations.
David Deon, velocity president
Velocity plans to offer flexible charging options to accommodate the needs of different fleets, including both managed, “charging as a service” subscription plans and self-managed/opportunity charging during daily routes. While trucks are charging, drivers and operators will be able to relax in comfortable break rooms equipped with WIFI, television, snacks, water, and restrooms.
Electrek’s Take
While it feels a bit underwhelming to write about trucking companies simply following the letter of the law in California, the rollout of an all-electric, zero-emission commercial trucking fleet remains something that, I think, should be celebrated.
As such, I’m celebrating it. I hope you are, too.
SOURCE | IMAGES: Global Newswire; Daimler Trucks.
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As I peruse Alibaba for all sorts of fun and interesting electric vehicles, I often stumble across seemingly outlandish products that often have a real use case behind them. The best of those make it into the recurring Awesome Weird Alibaba Electric Vehicle of the Week column, and that’s precisely where this man-carrying drone lands today.
To be fair, I’m not sure the main purpose of this flying EV is to carry people.
They do advertise it with a few images of a person suspended beneath it to show off the drone’s carrying capacity. And at least one of the photos seems like it’s actually non-recreational as the guy appears to be in the process of accessing a communications tower platform.
I guess for those who don’t want to spend half an hour climbing a ladder to change a light bulb or swap a connector, a drone might be a shortcut to some of these difficult access areas. It could also open up the worker pool for that job to not only people with Popeye’s forearms.
But manned work doesn’t seem like the main use case for a heavy-lift drone like this.
Instead, it appears to me that it’s primarily a work drone designed for utility tasks where you’d want to lift a serious amount of weight in tools or supplies.
The stated 200 kg (440 lb) weight-carrying capacity is quite impressive, especially since the unit only weighs 40 kg (88 lb) by itself. But you’ll want that extra lift potential for a number of its other advertised uses, such as a water sprayer for cleaning tasks or a heavy-lift drone for moving supplies in mountainous or otherwise hard-to-reach areas.
Some companies even seem to use them to clean wind turbine blades.
Interestingly, the drone can either run off of its 16 on-board batteries or can be tethered to an electrical cable for continuous flying. For longer duration jobs like window washing, that’s probably the better way to go.
The batteries only offer 20 minutes of flying time, and replacing 16 batteries with freshly charged units would probably take you another 20 minutes on the ground. That limited battery flight time also means that if you are going to use it to carry workers up onto aerial platforms, you better not take the scenic route.
The drone does come with three parachutes that can automatically deploy if it enters free fall, which makes me feel only marginally better about hanging onto that rope ladder and going for a ride.
The factory also advertises that the controls can be run tethered, so you don’t have to use radio frequency in areas where it might be jammed. That has me a bit worried about what other uses they’re envisioning for a heavy-lift drone like this, but I’ll leave that for another day.
With an advertised price of US $5,000, it also seems weirdly affordable. I have no idea what the going rate for a man-lift drone is these days, but I probably would have guessed more than that. You can barely buy an electric motorcycle for that much, and those only move in a single plane.
Of course, the catch is that you have to buy two of them, as that’s the minimum order quantity from the seller. So if you’re crazy enough to strap into one of these things, you better find an equally crazy friend for the second one.
And in case it wasn’t yet clear, please don’t actually try to buy one of these from Alibaba. This column is a tongue-in-cheek exercise in exploring just how amazing and interesting the world’s largest EV provider’s catalog of wacky vehicles has become. But I am certainly not encouraging anyone to run the financial and emotional gauntlet of trying to buy something expensive on Alibaba. I’ve been there and done that, and it’s not for the timid.
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China’s first major sodium-ion battery energy storage station is now online, according to state-owned utility China Southern Power Grid Energy Storage.
The Fulin Sodium-ion Battery Energy Storage Station entered operation on May 11 in Nanning, the capital of the Guangxi Zhuang autonomous region in southern China. Its initial storage capacity is said to be 10 megawatt hours (MWh). Once fully developed, the Station is expected to reach a total capacity of 100 MWh.
The state utility says the 10 MWh sodium-ion battery energy storage station uses 210 Ah sodium-ion battery cells that charge to 90% in a mindblowing 12 minutes. The system comprises 22,000 cells.
Once the project reaches 100 MWh, it could release 73,000 MWh of clean energy each year. That’s enough to power 35,000 households and reduce carbon dioxide emissions by 50,000 tonnes annually.
In an interview with China Central Television, Gao Like, a manager at the Guangxi branch of China Southern Power Grid, said that the energy conversion efficiency of its sodium-ion battery energy storage system exceeds 92%. It’s comparable to the efficiency of common lithium-ion battery storage systems, at 85-95%.
Chen Man, a senior engineer at China Southern Power Grid, said [via the South China Morning Post] that once sodium-ion battery energy storage enters the stage of large-scale development, its cost can be reduced by 20-30%. He continued:
This can be achieved through further improvements in the sodium-ion battery structure, manufacturing process, material utilization, and cycle life, thus lowering the energy storage cost per kilowatt-hour of electricity.
Large-scale sodium-ion batteries are gaining momentum due to their lower cost and abundance of raw materials compared to lithium-ion batteries. The challenges with sodium-ion batteries have been lower energy density and shorter lifespans that can limit efficiency and long-term performance in large-scale applications.
Read more: A new sodium-ion battery breakthrough means they may one day power EVs
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