Tesla is shifting its strategy, moving from car sales to rentals as demand in the U.S. has significantly dropped. They’re now rolling out short-term rental options at their locations amid rising inventory levels.
The new service started quietly in early November at stores in San Diego and Costa Mesa, California.
This shift comes after Tesla’s shareholders approved a substantial $1 trillion compensation package for CEO Elon Musk, which the company hopes will aid their efforts in the humanoid robot sector.
Customers can rent a Tesla for a duration of three to seven days, with rates beginning at approximately $60 per day, depending on the model.
The vehicles available include Model 3, Model Y, Model S, Model X, and the Cybertruck.
Each rental encompasses Tesla’s advanced driver assistance features, along with Supercharger access and Fully Autonomous Driving (though supervised), all at no additional cost and with no mileage restrictions.
However, there’s a catch—renters are not allowed to take the car out of state.
If customers choose to buy a Tesla within a week of their rental, they will receive a $250 credit towards the purchase.
This initiative is Tesla’s latest effort to put more drivers behind the wheel, particularly as electric vehicle sales in the U.S. have declined following the end of the federal EV tax credit.
The disappearance of the $7,500 incentive has diminished consumer demand, affecting Tesla’s profit margins as a result.
Sales briefly spiked as customers rushed to finalize deals just before the tax credit expired.
The rental program is expected to grow beyond Southern California by the end of this year.
Two years ago, Tesla hinted at entering the rental market with job postings related to rental services. This launch represents the first nationwide execution of such a plan.
Manufacturers are marketing these rentals as extended test drives, attempting to sway tentative buyers rather than directly competing with traditional dealerships.
“Rent a Tesla and see how much more enjoyable it can be for errands, commutes, or road trips,” the company mentioned in an email to customers.
Still, this move underscores the fact that Tesla’s sales in the U.S. have dropped, impacted by price wars, rising financing costs, and new challenges from established automakers.
During the first eight months of 2025, Tesla’s U.S. sales decreased by 24% compared to last year.
By the third quarter of this year, Tesla’s market share fell to 38%, down from nearly 80% a few years back, and from 49% just a year prior.
Hertz has also been pulling back on Tesla vehicles over the past two years as profits dwindled due to falling resale values.
The company has yet to respond to requests for further comment.
