Tesla Increases Lease Prices Following Tax Credit Expiration

On Wednesday, Tesla announced via its website that it has raised lease prices across all U.S. vehicles. This move comes in the wake of the expiration of a $7,500 federal tax credit aimed at boosting electric vehicle sales.

This change follows the conclusion of tax incentives from the recent Sweep Act passed by Congress, which discontinued both $7,500 credits for new electric vehicle leases and purchases, as well as $4,000 for used electric vehicles.

Elon Musk’s company, along with its competitors, had previously passed these credits on to customers through attractive leasing options.

For instance, the lease prices for popular models like the Model Y have increased from a range of $479 to $529 to now balooning between $529 and $599. In contrast, the pricing for other vehicles has remained steady.

The Model 3’s lease prices, meanwhile, have shifted from between $349 and $699 to $429 and $759 monthly.

There’s a noticeable trend where the demand for battery-powered vehicles seems to be waning after experiencing rapid growth earlier in the decade. Automotive analysts are sounding alarms that sales may begin to decline now that the tax incentives are no longer in play.

Interestingly, Tesla’s market share in the U.S. recently plummeted to its lowest level in almost eight years, as reported by research firm Cox Automotive.

Once dominating over 80% of the U.S. electric vehicle market, Tesla only captured 38% of the total EV sales in August, according to the preliminary data from Cox.