Tesla leasing service is in trouble, and car residual value management faces new challenges

According to the latest released data, the leasing business of Tesla, a well-known American electric vehicle manufacturer, has experienced a significant decline in the latest quarter. This change has attracted widespread attention in the industry and triggered in-depth discussions on the reasons behind it.

According to data released by Tesla, the latest sales data show that in the fourth quarter of last year, only 2% of Tesla’s best-selling models Model 3 and Model Y were included in operating lease accounting. subjects, while the proportion for other models is only 3%. Both figures are the lowest since Tesla began reporting production and delivery data in 2019.

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According to the latest research report by Jefferies analyst Philip Hawes, the proportion of Tesla’s operating leasing business is declining sharply, which may mean that Tesla is facing difficulty in providing attractive lease prices to consumers. Hawes further said that while this may not have a direct negative impact on Tesla's short-term profitability, he is concerned about its ability to manage vehicle residual values ​​in the long term. This situation has raised concerns about Tesla's future development.

Car residual value is critical to assessing the attractiveness of a car rental business. It refers to the value that a vehicle is able to retain during its ownership or lease contract. If a car doesn't hold its value well, the leasing company will often make up for the potential loss in value by raising the down payment or monthly lease fee. However, doing so will undoubtedly make the rental business less attractive. Therefore, car residual value is one of the important factors that leasing companies need to pay attention to and manage.

In the past year, the second-hand residual value of Tesla vehicles has suffered multiple shocks. Tesla has adopted a strategy of multiple price cuts, which has put tremendous pressure on car rental companies like Hertz and Germany's Six SE. These price cuts not only directly affect the price of Tesla vehicles in the second-hand market, but also further reduce consumers' willingness to choose to lease Tesla vehicles.

Meanwhile, the introduction of the U.S. Inflation Reduction Act provides commercial vehicles with the opportunity to more easily qualify for electric vehicle tax credits. The existence of this policy loophole has led other automakers to consider launching electric vehicle rental businesses in the U.S. market, thus bringing greater competitive pressure to Tesla.

It is understood that Tesla faces the challenge of how to increase the residual value of its electric vehicles while maintaining the price competitiveness of its electric vehicles. In addition, as competitors enter the electric car rental market, Tesla also needs to find new strategies to cope with the fierce competitive environment.

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