Typically when someone leases a car, there’s an offer to buy it back at the end of the lease term. Up until recently, Tesla put in place a policy that prevented this. CEO Elon Musk said the automaker needed the lease turn-ins for a fleet of self-driving “Robotaxis.” Instead, the company went on and sold them as used cars at higher prices.
Reuters reported last week of Tesla’s practice, and that the automaker ended the policy last November. It started denying the option for lease buyouts with the Model 3 in 2019, and expanded the policy to all its cars in 2022.
Rather than sit on inventory of cars for “Robotaxi” fleet that, to date, hasn’t materialized, it added software-based upgrades to the cars and sold them for a profit. One of the anonymous sources who revealed the practice to Reuters said it was an easy way to “jack up the prices” on the used market.
Reuters notes that this practice is not illegal, just misleading to lessors, and to investors. Tesla making it seem like was about to deploy a fleet of self-driving cars imminently helped push it to become the world’s most valuable automaker. But this policy nearly hoisted Tesla by its own petard, as sales of its new cars and values of its used cars are falling in the US thanks to Musk’s foray into politics.
Edmunds analyst Joseph Yoon told Reuters he suspects Tesla ended the policy so it wouldn’t “caught holding the bag.” Though it’s also worth noting that Tesla debuted the Cybercab, a concept of a model made exclusively for self driving, last October.
As Reuters points out, Elon Musk has promised that self-driving cars were one year away every year since 2016. While his promises haven’t turned into reality, it’s paid off handsomely for shareholders regardless.
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