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In a strategic pivot to address ongoing global sales declines, Tesla has reportedly ventured into the short-term car rental market directly from its showrooms. This new initiative allows customers to rent Tesla vehicles for durations typically ranging from three to seven days, a move distinct from long-term leases.
Prices for these rentals commence at $60 per day, varying based on the specific model and its equipped features. Notably, all rental vehicles come with complimentary Supercharging, a perk that could serve to allay common concerns about electric vehicle range and charging accessibility. Furthermore, Tesla’s “Full Self-Driving (Supervised)” capability is also included, offering renters a firsthand experience with the advanced driver-assistance system.
This foray into rentals follows a challenging period for Tesla’s sales performance. While the end of the $7,500 tax credit did provide a temporary boost, leading to 497,099 vehicle deliveries in the third quarter of 2025—a 7.4% increase year-over-year—this proved to be a singular bright spot in an otherwise persistent downward trend worldwide. Reports suggest that various factors, including the public perception of CEO Elon Musk’s political stances, have impacted consumer interest, potentially costing Tesla over a million U.S. sales. Concurrently, European markets have seen significant drops, with sales in Germany plummeting 50% from the previous year. China also experienced a 35.8% decline, and the much-hyped Cybertruck saw a substantial 62.6% reduction in sales compared to last year. With a significant inventory of unsold vehicles and the tax credit no longer a stimulant, renting out these cars presents an immediate strategy to generate revenue from available stock.
The concept of renting Teslas, however, isn’t without its historical challenges. Rental giant Hertz famously encountered difficulties with its Tesla fleet. While some issues were operational, such as erroneous charges for gasoline on an EV, a more significant problem stemmed from the vehicles’ reliability and the high cost of repairs, ultimately leading Hertz to divest a large portion of its electric fleet. For Tesla, managing rentals in-house might mitigate external repair costs, but the inherent issue of vehicle depreciation, a major factor for Hertz, will now fall squarely on the manufacturer. Despite potential glitches and wear-and-tear associated with heavily utilized rental cars, this approach may still be more economically viable than allowing unsold vehicles to sit idle.
Currently, the Tesla rental program is limited to select locations in California, specifically San Diego and Costa Mesa. However, the company plans to expand its availability to more areas over time. As an additional incentive, Tesla is offering customers a $250 credit towards the purchase of a new vehicle within a week of their rental. While this incentive doesn’t replace the former substantial tax credit, it underscores Tesla’s commitment to exploring new avenues to engage customers and stimulate sales in a dynamic market.