Tesla barred U.S. lessees from buying their vehicles at the end of lease terms for several years, telling them the cars were intended for a future autonomous ride-hailing fleet, but instead resold “many” of the vehicles to new buyers after adding software features, Reuters reported on Thursday.
The company had introduced the policy in 2019 with chief executive Elon Musk saying at the time, “You don’t have the option of buying,” at an investor gathering in California.
“We want them back.” Musk added: “Next year, for sure, we’ll have over 1 million robotaxis on the road.”
Citing four people familiar with Tesla’s retail operations, the report said the company instead began selling the off-lease vehicles to new customers, sometimes adding software features such as “Full Self-Driving” — priced as high as $15,000 — and “acceleration boost,” sold separately for $2,000.
“It was an easy way to jack up the price,” one of the people told the media outlet, which noted that the practice, while legal, went against what Tesla had publicly stated about its lease terms.
For years, Tesla’s website stated that “Model 3 and Model Y leases are not eligible for purchase regardless of delivery date” and that vehicles delivered after April 15, 2022 “are not eligible for purchase.”
According to Reuters, Tesla’s leasing policy reversal occurred on November 27, 2023, when its North America account posted on X: “Lease buyout now available” for new contracts. The website was updated to indicate that leased vehicles “may be eligible for purchase.”
In the interim, Reuters said Tesla used the policy to profit from a used vehicle market that surged following the onset of the COVID-19 pandemic.
Former employees told Reuters that Tesla modified many returned vehicles with software upgrades before reselling them, often at higher prices than the lease buyout amount would have been.
The explanation to customers — that the vehicles were needed for a robotaxi fleet — “never changed,” one person familiar with operations told Reuters.
According to Tesla’s financial disclosures, more than 314,000 vehicles — about 4.4% of its total deliveries — were leased globally between 2019 and 2023. Reuters said it remains unclear whether the no-purchase policy applied outside the United States.
Financial Times reported this week that Tesla’s board is considering new compensation arrangements for Musk as uncertainty grows over the status of his voided $56 billion pay package.
A special committee of the board, consisting of Chair Robyn Denholm and director Kathleen Wilson-Thompson, has been evaluating alternatives, including a fresh grant of stock options.
