Tesla can’t sell its cars anymore so it is renting them now

Tesla is launching a new car rental program out of its stores in the US, as sales are crashing due to the end of the federal tax credit.

It’s available at select stores in the US right now.

Tesla’s demand in the US, like that of most other electric vehicles, has crashed after the federal tax credit for electric cars ended last quarter, pulling forward a lot of demand.

With inventories piling up at stores and dealers across the country, Tesla has found a new way to use its inventory: it is now renting (not leasing) its vehicles from its stores.

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The rental duration is a minimum of three and a maximum of seven days, starting at $60 per day and increasing depending on the model.

Tesla appears to be using this to show potential buyers how convenient it is to own a Tesla vehicle, since it also includes Supercharging and Full Self-Driving (Supervised) for free with every rental.

If a rental customer decides to order a vehicle within a week of having rented one, Tesla gives them a $250 credit toward the purchase:

Order your own Tesla within seven days of your rental to get up to a $250 credit toward your purchase.

The program is starting with a couple of locations in Southern California, but it is expected to expand before the end of the year.

Car rental giant Hertz has previously bought a large fleet of Tesla vehicles in an effort to electrify its rental fleet.

However, Hertz has been divesting from Tesla vehicles and selling them over the last 2 years, as declining resale values crushed its fleet economics amid Tesla slashing prices due to declining demand over the last 3 years.

Electrek’s Take

It’s rough out there for people selling electric vehicles in the US right now. The lack of policy consistency is resulting in inconsistent demand and discouraging automakers from pushing electric cars, as they do in Europe and Asia.

It’s particularly challenging for automakers like Tesla, Rivian, and Lucid, which sell only electric vehicles, because most people who planned to buy an electric vehicle in 2025 have already bought one in Q3 or earlier.

This rental service is not a bad idea, though, but it’s obviously far from a solution to the demand problem in the US.

It’s wild to think that Tesla’s own CEO is largely responsible for creating this situation by backing Trump in the last elections.