Tesla no longer wants to sell cars

Elon Musk has announced that in the future, cars will only be available for lease. Even today, many customers rely on leasing offers, and manufacturers are selling their vehicles less frequently. Volvo is pioneering this approach. The Swedes expect that soon, more than half of the new car business will be conducted through subscriptions. In 2021, 13 percent of customers have already opted for the rental offer, about half of whom were private customers.

Tesla's Own Financial Service Provider

The manufacturer sells the car to its own financial service provider, which then passes the vehicle on to the customer. The customer is allowed to drive the car for a few years and can then either buy it at the residual price or exchange it for a new model from the same manufacturer. The used car then usually goes abroad. The advantages of the subscription over leasing are the shorter and more flexible terms. However, the subscription model is usually somewhat more expensive than leasing.

Always the Latest Technology

As with many smartphone contracts, users should always be supplied with the latest technology. So, customers are always driving the latest model. The hardware and software of the cars is also one of the reasons why Elon Musk is considering a pure subscription or rental model. The increasing digitalization is making cars more expensive. The costs to equip a vehicle with semi-autonomous driving aids amount to up to 20,000 euros. This is unaffordable, especially in the mid-range market. Many years are likely to pass before the technology becomes cheap enough to be standard in vehicles. And while the software can be updated wirelessly via "over-the-air" updates, this is not possible with the sensors. If a manufacturer installs new sensors in a new model, the previous models become outdated on the spot.