Channel | Auto Industry News

Would a Leasing Program Benefit Tesla?

Via Auto Remarketing

CINCINNATI – You can’t secure a traditional consumer lease from Tesla. But the company did recently introduce its new Resale Value Guarantee program that offers a similar deal.

The program offers to buy back a Model S between 36 months and 39 months at a guaranteed residual.

According to Tesla officials, “When combined with a car loan provided by Tesla’s banking partners, this program gives customers the functional equivalent of a lease.”

But there’s a caveat.

The program is positioned as a lease program, but the owner still has to finance and pay taxes on the vehicle.

According to Scot Hall, executive vice president of, these and other factors are keeping Tesla from enjoying the true benefits of a leasing program.

The car brand has introduced a program that is masked as a lease, but finding a way to offer a traditional lease will benefit Tesla’s ability to compete against other luxury brands, as well as additional benefits for consumers, Hall suggested.

In April of this year, Tesla did launch a leasing program for small and medium size buisnesses in an effort to provide companies “the ease and simplicity of being able to deduct payments from their business taxes,” according to the company. For more on Tesla business leasing, see the automaker’s blog post here.

Hal explained that many other luxury brands use consumer-facing leasing programs as a way to ramp up growth as well as an outlet to push new EVs that compete directly with Tesla models.

“A standard lease program would benefit customers and help Tesla grow its brand further and compete against other luxury makers that are now focusing on EV technology,” said Hall. “Look at the success luxury brands such as BMW and Mercedes-Benz have had as a result of their lease programs, which see between 50 percent and 70 percent lease rates for higher-end models. These lease programs have played a large part in the growth these brands have enjoyed over the years, particularly as they introduce EV models to compete against Tesla.”

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