Tesla Expands Q4 2025 Incentives with Free FSD, $299 Leases

Building on initial December promotions amid global sales challenges, Tesla details U.S.-focused incentives like zero-percent financing, $299 monthly leases, and three months of free Full Self-Driving to clear inventory and offset lost federal tax credits after November's sub-40,000 unit sales.

Tesla's late 2025 promotions, as previously reported, now highlight specific U.S. offers to meet Q4 delivery targets exceeding 500,000 units globally. Free premium upgrades (e.g., wheels, interiors, towing) apply to inventory models while supplies last. Model Y Standard Range qualifies for 0% APR over 72 months, saving over $5,000 in interest, alongside zero-down leases from $299/month for Model 3 and Y.

Buyers also get three months free Full Self-Driving and Supercharging, stackable with state incentives in California and New York for up to $10,000+ savings. These expire December 31 and address softening demand from high rates, infrastructure worries, and rivals like Ford and GM, with Tesla holding 50% U.S. EV share.

The moves support quarterly goals amid competition, prioritizing immediate value through software updates and direct sales.

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Photorealistic rendering of Tesla's upcoming compact SUV on a Chinese factory line with Elon Musk approving the design.
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Tesla developing compact affordable SUV amid strategy shift and sales slump, Reuters reports

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Tesla is developing a new compact electric SUV priced below the $36,990 Model 3 and measuring 168 inches (4.3 meters) long—shorter than the Model 3 (185.8 inches) and Model Y (188.7 inches)—according to Reuters citing four anonymous supplier sources. The all-new design awaits CEO Elon Musk's production approval and may launch first in China before expanding to U.S. and German factories, signaling a pivot back to core vehicles after a focus on robotaxis and humanoid robots.

Tesla reported a net income of $477 million for the first quarter of 2026, marking improved profitability over the prior year. Revenue rose 16 percent to $22.4 billion, driven by higher automotive sales and services. The company highlighted growth in full self-driving subscriptions amid ongoing investments in AI and robotics.

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