Leasing companies and Tesla fans condemn Elon Musk’s new stunt

At a time when inflation is still higher than desired, prices for several cars are actually falling. Elon Musk is also not averse to a price cut from time to time, as became clear again last week. But long-time Tesla fans, leasing companies and landlords are not satisfied with this.

At the beginning of this year, the Model 3 was reduced in price by up to 7,000 euros, after which it became SEPP eligible. That stands for Funding program for electric cars for private individuals and is intended to boost sales of electric cars.

Requirements for promoting electric vehicles

There are a number of requirements to qualify for this grant. For example, it must be an electric car with a WLTP range of at least 120 kilometers and the electric vehicle must be registered in your name for at least three years after purchase. The prerequisite is also that the list price is between 12,000 and 45,000 euros.

For the latter reason, many electric vehicles are offered for just under 45 grand. Last week, Elon Musk slashed the price of the Tesla Model Y. The entry-level version is suddenly 2,000 euros cheaper, which means that this model is now also eligible for the SEPP. Buyers of a Tesla Model Y can now get 2,950 euros from the funding pot. For this year, 67 million euros were available, of which around 30 million euros still remain.

Tesla fans are completely amazed

One would think that such a price reduction would be very nice. But landlords, leasing companies and those who bought a Tesla early are not happy about Elon Musk offering a discount. “Legally there is no foothold, but a significant price reduction remains crucial for fans and supporters early adopters.,” one enthusiast wrote on a Tesla forum after the price cut in January. “They are at a disadvantage because their most recent purchase suddenly shows a huge drop in value.”

Buyers of a Tesla Model Y who then hear that the electric vehicle suddenly costs 2,000 euros less (plus a 2,950 euro subsidy) will be very disappointed. Your new purchase suddenly loses significant value. If you want to sell your electric vehicle, you’ll need to lower the price further to make it look attractive compared to a new Model Y.

Price cut by Elon Musk is not welcomed

For leasing companies and rental companies, this loss of value is even more severe as they purchase hundreds or even thousands of cars at once. For this reason, the rental company Hertz is now putting the brakes on the electrification of its fleet. The brand ordered 150,000 Teslas two years ago to focus on electric driving.

However, you won’t find that many Teslas in Hertz parking lots, and that has to do with Elon Musk’s pricing stunts. Teslas have become significantly cheaper in recent months, especially in the USA, where the rental company is the largest. This has a significant (negative) impact on the residual value of electric vehicles. Another reason for Hertz’s reluctance is that repairing damage to electric cars is more expensive.