Tesla Increases Prices as Government Cash Support Ends

Key Insights

• Lease Increases: Tesla has raised lease prices for its popular electric vehicles following the expiration of the federal EV tax credit.
• Market Share Decline: Tesla’s market share has decreased from over 80% in 2017 to just 38% as of August 2023.
• Financial Impact: JPMorgan estimates that losing the EV tax credit could cost Tesla around $1.2 billion annually.
• Public Perception: Elon Musk’s involvement in politics has negatively affected Tesla’s reputation among liberal consumers.

Tesla raised the lease prices for its most popular electric vehicles on Wednesday, according to figures posted to the company’s website. The change comes after the federal EV tax credit, which was $7,500 for new vehicles and leases and $4,000 for used vehicles, expired on Tuesday.

Tesla’s model Y lease has jumped from between $479 and $529 per month to between $529 and $599 per month, Jalopnik points out. And Model 3 lease prices went from between $349 and $699 per month to between $429 and $759 per month.

Tesla still sells more EVs in the U.S. than any other company, but Elon Musk’s market share has eroded in recent years. Tesla accounted for over 80% of all EV sales back in 2017, at the dawn of President Donald Trump’s first term. But that’s down to just 38% this past August, according to CNBC.

Musk has built his empire on companies that rely on massive government funding, through contracts, loans, subsidies, and tax credits, according to the Washington Post, which recently tallied it all at $38 billion. But Musk, as head of the so-called Department of Government Efficiency (DOGE) until just a few months ago, did his best to dismantle the federal government without personally harming a single thing that benefited him financially.

The sole exception was the expiration of the EV tax credit, which Republicans worked hard to kill with Trump’s “One Big Beautiful Bill,” which passed in July. The tax credit was originally not scheduled to end until 2032 under the Inflation Reduction Act, which was passed under President Joe Biden and a Democratic-controlled Congress in 2022.

JPMorgan has previously estimated that the loss of the EV tax credit will cost Tesla about $1.2 billion per year. But it will take some time to see just how much of a dent is made by the EV tax credit going away. Tesla has already been suffering immensely, due in large part to Musk getting intimately involved in presidential politics.

Musk endorsed President Trump in July 2024 and spent over $270 million to get him elected. And the billionaire’s far-right politics caused the Tesla brand to suffer with liberal drivers, the people who used to support electric vehicles and Musk the most fervently. Musk’s two Nazi-style salutes on the day President Trump was inaugurated for a second time didn’t help his popularity with left-leaning car consumers.

Musk became the world’s richest person again this week after some brief competition from Larry Ellison. The Tesla CEO is now worth $500 billion, according to a new estimate by Forbes, becoming the first person in the history of the world to reach that milestone.

Tesla didn’t respond to questions emailed on Wednesday. Gizmodo will update this article if we hear back, though we’re not counting on it. Musk got rid of the company’s press relations team in 2020.