Tesla hopes to sell more cars in the second quarter after a tough start to the year.
The new lease it offers should help. This is a good deal.
Tesla offers a long-distance rear-wheel drive 3 model for $349 per month, lasting 24 months without money. Data provider Edmunds said it’s good considering that the average monthly payment for new cars is about $750.
The deal is new. Not on the website a few days ago. Tesla did not respond to a request for comment on when it will be online.
Automakers always offer transactions in the form of cash back, subsidized rentals or below market interest rates. Kelly Blue Book said the average incentive volume in March was about 7% of the transaction price. The average electric vehicle incentive rate is 13% of the transaction price. It takes some extra cost to bring the driver into a battery-powered car. (This is a figure across the industry, not specifically targeting Tesla.)
Tesla sold about 337,000 cars in the first quarter, down 13% from the same period last year. This is the worst quarter in company history. Elon Musk’s position in the Trump administration shut down some buyers. Even the company mentioned brand losses on its first-quarter earnings call. The upgrade to the Y model also led to some declines. Buyers usually wait for new models.
Investors are looking for any evidence of recovery. Paradoxically, the slower decline brings hope. Tesla’s European sales fell 28% from the same period last year. This is actually an improvement starting in February and January, with sales down 43% so far.
Ultimately, investors want to see positive numbers.
Whatever the reason, Tesla hopes to rebound. Wall Street expects about 410,000 cars, according to FactSet. This increase is still increasing despite tariffs and trade wars raising prices for consumers.
In Canada, the Y-type Y is now priced at around $85,000. That’s about $11,000 higher than in 2024. Tesla’s Canadian website can still allow buyers to search for retaliatory tariffs on Canadian cars imported from the United States, a response to President Donald Trump’s tariffs on U.S. imported cars
New cars entering the U.S. face a 25% tariff. Imported parts face a 25% tariff starting in May.
In the case of tariffs, trade wars and consumer confidence weakening, it is not easy to develop and develop profitably. Tesla reported first-quarter operating profit of $399 million. Regulated credit sales were $595 million.
Tesla earns points by generating a fair share of its zero-emission vehicles, so it sells points to other automakers who want to avoid fines. Nevertheless, this is the first quarter of credit sales exceeding net revenue since the second quarter of 2020. Since then, Tesla has sold $9.2 billion in credit, accounting for nearly 25% of reported operating income.
So far this year, Tesla shares have fallen 29%, trailing the S&P 500 by about 23 percentage points.
Write to al root at allen.root@dowjones.com
