Tesla is offering curiously cheap leases on its Model 3, creating in effect a low-cost car that’s available now, according to a longtime car market observer and entrepreneur.
The 2024 Tesla Model 3 rear-wheel-drive version is now available with a $299 per month lease (as of Sunday May 5), not including taxes and fees.
“This is their way of creating a $30,000 car today. This is a way for them to effectively get into the cheaper car market,” Pat Ryan, Founder & CEO of CoPilot, an AI-assisted car shopping app, told me in a phone interview.
Ryan made the following comparison with leased deals on the Honda Civic Sport:
- For instance, the Model 3’s current leasing terms are very similar to those being offered by the Honda Civic Sport – which has a current listing price of $25,500 (compared to $38,990 for the Model 3)
- Yet the monthly payments are very similar: $257 for the Civic Sport, compared to $299 for Model 3 and its down payments are exactly the same — $2,999
Model 3 deal too good, doesn’t make sense: Ryan says the lease deal is so good he has some “suspicions” about why Tesla is doing this. “By far, the best deal on the market is the Tesla Model 3. By far. It’s the kind of deal that’s so good it doesn’t make sense,” he said. “This is the first lease I’ve seen in a long time where you can’t buy the car out at the end of lease. [Tesla has] some kind of assumption that this Model 3 will be worth more than it should be at the end of the lease,” he said.
Robotaxi-ready: Tesla may be laying the groundwork for the Robotaxi, which may explain the highly competitive lease deal. “They’re subsidizing this in some way, shape, or form” preparing for Robotaxi, Ryan said. Tesla is saying in effect, “‘we’re going to make our lease deal twice as good as our purchase deal but you have to give us our car back. Which could [suggest] that they want it for the Robotaxi,” he said.
Next-generation affordable Tesla: Tesla’s existing models are getting “long in the tooth,” Ryan says. So, the company needs something new. “It’s clearly a new model,” he said in reference to the Model 2, a moniker given to Tesla’s next-generation affordable car, which CEO Elon Musk said could come as early as late this year. “That’s why it’s so hard,” Ryan said. “If you’re just updating the Model 3 that’s pretty straightforward.” But an entirely new car is much more involved, he said. “It’s an extremely aggressive timeline. If they’re talking about a $25,000 car, their cheapest car right now is a $39,000 purchase,” Ryan said. That’s a lot of efficiency to extract from a new manufacturing process, according to Ryan. Musk described future “new vehicles” that “will use aspects of the next-generation platform as well as aspects of our current platforms,” during the first quarter earnings conference call on April 23.