Tesla will start offering Model 3 leases in ‘6 to 9 months’, says Elon Musk

Currently, the only way to buy a Tesla Model 3 is to have a reservation and then buy the car outright or with a loan.

A lease is currently not available for the highly popular electric vehicle, but it could change next year, says Elon Musk.

Tesla is currently at a crossroad moment as it tries to become profitable after years of investing in the Model 3 production program, which is currently significantly increasing the automaker’s overall production capacity.

In order to achieve profitability, they have to focus on the highest margin versions of the car.

It results in Tesla only producing the Long Range battery pack and it is soon starting production on the All-Wheel-Drive Dual Motor and Performance versions, which are even more expensive.

Tesla CEO Elon Musk says that leasing also plays into that strategy since the program requires Tesla to put up the money upfront which negatively affects the company’s cash flow.

It’s why they are waiting to offer leases on the Model 3 and now Musk commented on the timeline:

Leasing negatively effects Tesla cash flow, so we prob won’t offer Model 3 leases for 6 to 9 months. Loan financing is a better deal anyway, as bank conservatism for new car models is v conservative about residual value, but Teslas have always had strong residual value.

— Elon Musk (@elonmusk) June 3, 2018

It would place the introduction of a lease program for the Model 3 early in 2019 – well after Tesla plans to have surpassed its 5,000 units per week production rate and achieved profitability.

Electrek’s Take

A few hiccups aside, the Model 3 is already quite a successful vehicle program. It is getting great reviews and it’s already becoming the best-selling vehicle in its segment where it is available.

But I think the biggest hiccup is the fact that it’s not yet available at nowhere near its advertised starting price of $35,000 nor can it be leased, which significantly increases the cost of having access to a Model 3.

The delay in achieving that base price and leasing the vehicle is understandable as Tesla needs to achieve profitability with the Model 3 program, but it also opens the door for other EVs to keep growing without Tesla’s competition at the lower price bracket.

There are some very attractive lease programs for the Chevy Bolt EV, Hyundai Ioniq Electric, and Nissan Leaf that are undoubtedly much cheaper than buying a Model 3.

I thought that we would see the deliveries of those cars surge after Tesla delayed the standard battery pack and the availability of a lease, but it has yet to have an impact.

It might be because of the availability of those vehicles still being limited, but it feels like there’s an opportunity that is being missed and could result in accelerating the deployment of EVs even more.

What do you think? Are you waiting for a lease program on the Model 3? Let us know in the comment section below.