Tesla leans into leasing with another round of price cuts

Tesla has taken its leasing push up a notch by slashing Cybertruck lease prices for the second time in three months, and reducing monthly payments for Model 3 variants as well.

By the numbers, here’s what Tesla did on Friday (courtesy of Sawyer Merritt on X):

• Model 3 Long Range RWD: $249/month from $299/month

• Model 3 Long Range AWD: $349/month from $399/month

• AWD Cybertruck: $749/month from $899/month—a 25% drop in just three months.

• Cybertruck Performance: $1,000 from $999/month—down from $1,204 last November.

The reason? EV leasing is booming. Nearly 50% of new EV transactions are leases, largely because they qualify for the $7,500 federal tax credit (while it lasts) without the income, price, or battery sourcing restrictions that apply to purchases, according to Experian. 

• Tesla is leveraging this loophole to make its leases more competitive, especially after the automaker’s Q4 earnings missed expectations. 

• During its Q4 presentation, Tesla noted that affordability remains top of mind for customers. The company stated that it intends to “review every aspect” of its cost of goods sold per vehicle to help make its EVs affordable.

But here’s the twist: While Tesla is lowering monthly payments, it’s quietly increasing end-of-lease buyout prices. 

• The Cybertruck AWD buyout now sits at $57,400, up from $54,950, while the performance model jumped from $67,500 to $71,730. 

• Meaning—ean Tesla expects the Cybertruck to hold over 70% of its value after three years and 30,000 miles. 

A bold estimate considering used EV depreciation. You see—the value of used EVs is falling fast. 

• Prices have dropped 42% since their peak in July 2022 and from January to October 2024 alone, they fell 10%.

• And when the value of a vehicle drops lower than the automaker expected over the duration of the lease, the customer ends up paying more to buy out the car if they choose.

• If the difference is affordable, oftentimes consumers will buy the vehicle outright, but it’s too expensive, the lease gets returned back to Tesla as a used model. 

Bottom line: Tesla is playing both the short and long game. Lower lease prices could help move more vehicles today, and rising buy out costs suggest Tesla sees strong future demand for used models. By amplifying its leasing efforts, the automaker is positioned to move some metal and strengthen its used car pipeline.

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