NVDA
NVIDIA
-- 108.380 TSLA
Tesla
-- 259.160 PLTR
Palantir
-- 84.400 AMZN
Amazon
-- 190.260 GOOG
Alphabet-C
-- 156.230 
Tesla now offers lease buyouts – after saying it would keep cars as robotaxis: Is Autonomous Driving Further Away?
Tesla has started offering lease buyouts on all its vehicles, allowing customers who lease a Tesla to purchase their vehicle at the end of the lease term. But this represents a pullback from its previous autonomous vehicle ambitions.
In yet another end-of-week release of Tesla news, Tesla has updated its webpage for lease-end options to describe a new option for Tesla leasers: the ability to purchase your car at the end of your lease term.
The new policy applies to all of Tesla's vehicles, including Cybertruck, Model S, Model 3, Model X and Model Y, as of today, Nov 27, 2024 (though not in Iowa or Louisiana). There is a USD350 purchase fee, and third-party dealerships are allowed to purchase the vehicles.
Many other companies offer something similar, with owners treating the lease as somewhat of a "trial term" before purchasing the vehicle. There are also potential financial benefits – for example, leasing makes it easier to get the US EV tax credit, and as a result some companies that don't qualify for the purchase credit have created unique insta-buyout lease options to make use of this exception.
But Tesla hasn't offered this option for some time. Ever since the Model 3 started leasing, Tesla said that it would not allow lease buyouts at the end of the term, and instead that it would retain ownership of the vehicles and put them into work in a massive robotaxi fleet, taking advantage of Tesla's Full Self-Driving technology.
But that didn't just apply to the Model 3, as Tesla ended lease buyouts for all models in 2022, after having previously offered them on Model S/X. This happened during a strange period in the new vehicle market, with lots of vehicles experiencing price spikes due to COVID-related supply disruptions, but also falls in line with Tesla's previous ambitions and statements about wanting to retain vehicles for an autonomous robotaxi fleet.
Needless to say, this hasn't panned out exactly as Tesla might have hoped. Tesla's Full Self-Driving capability, despite being promised "next year' every year for almost the last decade, is not yet able to fully drive the car without a driver.
So this change could represent a pullback for Tesla's autonomous vehicle ambitions. Musk has said in the past that its vehicles would become appreciating assets due to their ability to be used as autonomous robotaxis. The theory goes, you could send out your car to pick up passengers and drive them around, making you money on the side when you aren't otherwise using the vehicle.
Because of this, Musk even once said that Tesla would stop selling cars once it solves autonomy, since it would be able to make more money providing autonomous rides than by selling cars.
Since then, Tesla has pivoted from talking about its regular cars as potential robotaxis to offering a whole separate robotaxi product, in the form of the Cybercab, which was unveiled last month. Though Musk also said during that unveiling that Tesla's other vehicles would still be usable as robotaxis (well, most of them anyway).
That product is supposed to come out within two years, which means any standard 3-year lease term that starts today would end after Tesla has solved self driving – if you take their word for it. If that's the case, then starting a lease buyout option for cars leased today wouldn't make a lot of sense if you're confident that they could be used as robotaxis in less than three years.
So it's hard to think of this news as anything but a pullback in Tesla's self-driving plans. If it's true that Tesla thinks vehicles can make more money as robotaxis, and it's true that Tesla thinks it will solve self-driving in the next two years, then why would Tesla suddenly start allowing buybacks that said it wouldn't do specifically because of those two things?
So – either Tesla thinks it can't make much more money with robotaxis, or it thinks it can't solve self-driving before today's lease terms are up.
Of course, there's one other explanation – Tesla just wants to end this quarter strong. The company has already pulled several demand levers lately, with 0% financing, lower lease prices, and a "one-time" FSD transfer scheme for the fourth time as it's trying to make up for a bad start to the year. It's one of the few EV companies whose sales are down year to date as the rest of the industry continues to grow, and is trying to end the year flat-to-positive on sales compared to 2023.
It has some work to do to catch up, so we're not surprised to see more demand levers being pulled. Nevertheless, this change still doesn't jive with Tesla's previous self-driving ambitions – and that's notable.
Tesla's introduction of lease buyouts comes amid a series of developments in its autonomous vehicle strategy.
In Apr, Musk hinted at a unique ownership model for Tesla's robotaxi fleet, which he described as a blend of Airbnb and Uber, with the potential name "Cybercab" reported during a first-quarter earnings call.
Later, in Sep, Musk asserted that traditional buses would become obsolete once Tesla's robotaxis, equipped with full self-driving capabilities, were operational. He emphasized that these robotaxis would offer point-to-point transportation at costs comparable to bus tickets according to his statements on social media.
In Oct, Tesla unveiled the two-seater Cybercab, a dedicated robotaxi product, at an event in Los Angeles. The vehicle, expected to be priced under USD30,000, was showcased with its self-driving capabilities.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
bullrider_21
Moo Contributor
Follow me to get useful analysis, learn TA and make profitable trades.
Maximise profit 利润最大化
12K
Followers
55
Following
34K
Visitors
Follow
MARKET-TEST-DUMMY : I mean that's pretty ingenious if you think k about it. Specially if fully implemented.
Forseen problems might be, your ride gets hacked. Or worse become a ransom situation. Technology is great. But with advancements in it you also start to discover new problems. Which is the continuous cycle. Drive for a better (fill in the blank here).
People are truly amazing. Can't wait for the system to catch up and blast the ones who do wrong. Right now people get away with stuff because of lack of getting caught. With AI advancing at a crazy rate. Hopefully we will end up in a brighter future with less crime. With more cameras everywhere now more than ever. There won't be anywhere to hide. Less privacy to come also though. Preying for an abundant calm world for the future.
Still, thanks for the post. I found it informing and thought provoking. Will be looking for more of their robotaxi stuff and more of your posts.
Just a thought that just hit me. Will this be more control from a government aspect later? Travel becoming more expensive. The more autonomous vehicles on the road sharing information, are you going to be seen as the liability? Forcing you out of owning due to costs like insurance. Just a thought. They say driving is a privilege. They also say that your privileges/rights have been slowly taken from you.
bullrider_21 OP MARKET-TEST-DUMMY : np. Glad you enjoyed my posts.
Certainly, getting hacked will be a problem. It would be bad for those depending on ride-hailing for a living.
MonkeyGee : it's because the cars are so bad that even the maker doesn't want it back. Meanwhile, thousands of miles overseas multiple EV companies are going live with robotaxi.
MARKET-TEST-DUMMY MARKET-TEST-DUMMY : Owning the cab is an interesting concept. Will profit outweigh wear and tear?
bullrider_21 OP MARKET-TEST-DUMMY : I doubt the costs are as low as Musk claims. If the ride costs as low as a bus fare, drivers can't earn much and I doubt that they want to sign up.
MARKET-TEST-DUMMY MonkeyGee : That could be said for all cars. They all could be improved upon. So if they solve the bad for environment issue. Build better, more advanced infrastructure. Which is needed anyway. Like energy can be created using a stator or magnetic field and people are always traveling. Why not use the vehicles to offset the energy consumption or at least add back to the grid. With the induction charging they have available also. My theory is simple. When being taught electricity, your learning a system. Their system. Yes, some of it will make sense to you when learning. The real advancements IMO are when someone thinks outside the box. I still have plans for a generator that uses no fuel for say. It requires movement same as any other form of energy. I have faith that the knowledge is there and/or coming soon. If we could get past the selfishness and greed as a whole with all the available ways to communicate, we could do amazing things!
As for the stock. I play both ways and enjoy the movement. Look forward to their advancements and progress with their continued attempts to push the envelope.
MARKET-TEST-DUMMY MARKET-TEST-DUMMY : Clarification, I don't short stocks. But I instead take advantage of options and their tickers cycles when available.