Tesla is launching a direct car rental service in a bid to revive flagging sales and entice new buyers, as the electric vehicle maker grapples with market challenges and high prices.
The new strategy allows individuals to rent vehicles directly from Tesla, bypassing traditional rental agencies. The service is currently available only in San Diego and Costa Mesa, California, but the company plans to expand it nationwide.
This move follows a significant decline in Tesla’s sales in 2025, particularly in European and Chinese markets where the brand’s presence has considerably diminished. Further sales reductions are anticipated with the elimination of electric vehicle subsidies.
Rentals begin at $60 per day for the most basic model, with prices increasing for luxury vehicles. The minimum rental period is three days, and the maximum is seven.
The rental package includes free Supercharging and Full Self-Driving (Supervised) capabilities. Drivers using the supervised autonomous driving mode are still required to keep their hands on the steering wheel and monitor the road.
To encourage purchases, Tesla offers a $250 discount to any renter who decides to buy a vehicle within one week after their rental period ends. The company hopes this incentive will help convert temporary users into long-term customers.
However, the high cost of Tesla vehicles remains a significant challenge. Without government aid, the company faces an uphill battle, especially as the long-anticipated “affordable Tesla” has yet to materialize.
The decision to enter the rental market also places Tesla in direct competition with established car rental services like Hertz. The company acknowledges that rental operations are not typically highly profitable on their own.