Tesla Launches Car Rental Program - rent a Cybertruck from Tesla in SoCal for $75/day with FSD & Supercharging included

[YDR37]

I don’t see this as any kind of subsidy.

Do Avis, Hertz, or Budget pay for your gasoline? The Tesla rentals include free Supercharging.

The Tesla rentals are for 3 to 7 days, with the first 48 hours free. So let's say you get a Cybertruck over a 3-day weekend. It's $75/day, but the first two days are free. So you pay Tesla $75, or an average of $25/day, and Tesla eats all the Supercharging costs. Not convinced that this is a cash cow for Tesla.

In my opinion, it will be very profitable

We'll find out after December 31, depending on whether Tesla cancels or expands the program.

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[hemiarch]

Do Avis, Hertz, or Budget pay for your gasoline? The Tesla rentals include free Supercharging.

The Tesla rentals are for 3 to 7 days, with the first 48 hours free. So let's say you get a Cybertruck over a 3-day weekend. It's $75/day, but the first two days are free. So you pay Tesla $75, or an average of $25/day, and Tesla eats all the charging costs. Not convinced that this is a cash cow for Tesla.

And when 20 people call trying to book those 5 cybertrucks every week, the price will be adjusted. It’s a beautiful thing, the market.
In my opinion, it’s exceptional out of the box thinking. Well done Tesla.

 

[MyFirstElectricTesla]

It’s no fun if they limit 85 MPH max, specially with Plaid.

 

[hemiarch]

It’s no fun if they limit 85 MPH max, specially with Plaid.

Still pretty fun. But I get what you’re saying.

 

[Cyber_95]

If I was on a short trip to one of these cities, I'd 100% use Tesla rental vs. Hertz (my current RAC company of choice). The per day pricing is cheaper than Hertz, even more so after you factor in gas savings. The only downside is the logistics of getting from the airport to the Tesla location.

 

[hemiarch]

If I was on a short trip to one of these cities, I'd 100% use Tesla rental vs. Hertz (my current RAC company of choice). The per day pricing is cheaper than Hertz, even more so after you factor in gas savings. The only downside is the logistics of getting from the airport to the Tesla location.

Me too. Not just because I’m a Tesla nut and know how much better of a vacation I’ll have in the Tesla but also because it’s objectively cheaper
But the logistics difficulties are another place to gain an edge. They uber you or Waymo you (or eventually Robotaxi you) to the storage lot and then they cut another cost that Dollar or Alamo charge you for. The dude with the ridiculous tie they are paying airport rent to provide a desk and shuttle bus for.

 

[tingmo13]

one has to download Tesla App-newbie will be astounded of so many features in there plus the EVs' dynamic drive. Many people who already own Tesla have disappointment driving ICE during travel-this would relieve it.

 

[YDR37]

Update: as of right now, both the San Diego Miramar and Costa Mesa stores are completely booked. So Tesla isn't accepting any more rentals at these locations at this time.

Will check back later to see if things have changed. Maybe Tesla makes the rental terms less attractive, by raising the pricing or by dropping free Supercharging. Alternatively, maybe Tesla keeps the same pricing, but adds capacity and more reservations open up. We'll see.

 

[Sjohnson20]

This could be the future. Your rental car picks you up from the airport. I love it. Hopefully it happens.

 

[hemiarch]

Update: as of right now, both the San Diego Miramar and Costa Mesa stores are completely booked. So Tesla isn't accepting any more rentals at these locations at this time.

Will check back later to see if things have changed. Maybe Tesla makes the rental terms less attractive, by raising the pricing or by dropping free Supercharging. Alternatively, maybe Tesla keeps the same pricing, but adds capacity and more reservations open up. We'll see.

Not a huge shock. Look how quickly that happened. Telling you guys, there is big business to be had here. Also open up the parking lots at the service centers. So many advantages for Tesla. I’d be disappointed if they didn’t run with it after December.

 

[YDR37]

I have some experience with traditional ICE car rentals. Chances are that you do too. And based on my experience, there are some unusual features about Tesla's approach:

1. Rent for 3 to 7 days, but the first 48 hours are free. No car rental company has ever offered me this deal.

2. Free Supercharging. No car rental company has ever paid for my gasoline.

3. Up to $250 off a car purchase after rental. No car rental company has offered me a rebate if I purchase my rental vehicle.

However, each of these points make perfect sense if Tesla is really offering extended test drives:

1. Tesla has historically offered three kinds of test drives: 30 minutes, 24 hours (overnight), and 48 hours. And Tesla has never charged potential customers for those test drives. So there is precedent that the first 48 hours of a Tesla test drive are free.

2. Has any car salesman ever tried to charge you for the cost of fuel during a test drive?

3. This is an obvious move if the real goal of the rental program is to sell Teslas.

So I don't think the "rental program" is really a rental program. The attractive terms are intended to get potential customers behind the wheel of a new Tesla for multiple days, in the hopes that they will get hooked and make a purchase. If so, then the success or failure of the program will not depend on the number of rentals -- it will depend on whether the rentals translate into sales.

 

[hemiarch]

Can’t it be both? That’s the beauty of this approach.

 

[YDR37]

Can’t it be both?

The problem with "being both" is the pricing.

If Tesla is running a commercial car rental service, then obviously it needs to turn a comfortable profit. Hertz and Avis are renting cars in order to make money, and Tesla should have the same goal. So in this scenario, Tesla should set rental costs as high as is reasonably possible, to maximize profitability.

But if Tesla is running an extended test drive program, then it doesn't need to turn any profit at all. In this case, it's OK if Tesla only breaks even on rentals, or even loses a little money, as long as the rental program boosts vehicle sales. In effect, the rental program is a marketing expense. So in this scenario, Tesla should set costs as low as is reasonably possible, to attract the greatest number of potential new vehicle buyers.

If Tesla sets rental prices high, to ensure that the program is profitable, then it will be harder to convince potential car buyers to take extended test drives. If Tesla sets prices low, as an incentive for new car buyers to take extended test drives, then they could lose money on people who are happy to take advantage of a cheap rental, but who have no intention of buying.

 

[hemiarch]

The price is maybe not profitable now which I’m not sold on but defer to the far more business savvy than me to decide but it doesn’t have to remain stationary if there is demand.
in the meantime it’s good marketing. Win.

 

[YDR37]

The price is maybe not profitable now which I’m not sold on but defer to the far more business savvy than me to decide

The current pricing is clearly below normal market rates. You don't have to take my word for it, look what others are saying:

If I was on a short trip to one of these cities, I'd 100% use Tesla rental vs. Hertz (my current RAC company of choice). The per day pricing is cheaper than Hertz, even more so after you factor in gas savings.

Everyone loves a sweet deal on a rental car, so it's not surprising that Tesla sold out quickly. In fact, Tesla probably expected this to happen.

So why is this deal limited to only two locations for only two months? Seems like below-market rental car rates would be instantly popular everywhere.

The most likely answer (in my opinion) is that Tesla sees low-cost car rental as a potential tool to boost vehicle sales, and they are testing this approach to see if it works. It's probably not coincidental that Tesla is introducing the rental program during a quarter when EV sales are expected to be unusually low.

But if I'm right, the fact that the program is selling out does not necessarily mean that it is a success. It will only be a success if the cheap rentals actually boost the sales of new Tesla vehicles at the SD Miramar and Costa Mesa Stores.

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