Tesla Abandons Robotaxi Lease Plan, Sells Off Vehicles Instead

In a surprising shift, Tesla has ended its controversial no-buyout lease policy, originally designed to reclaim vehicles for its planned robotaxi fleet, and instead sold the cars to new buyers. This move, reported by Reuters, marks a significant pivot for the electric vehicle giant, raising questions about its autonomous driving ambitions and customer trust.

A Failed Strategy for Robotaxi Deployment

Tesla introduced its no-buyout lease policy in 2019, targeting its mass-market Model 3 sedans. The plan, as articulated by CEO Elon Musk, was to reclaim these vehicles at the end of their leases to build a robotaxi network. “You don’t have the option of buying,” Musk stated at an investor gathering in California in April 2019, adding, “We want them back.” He projected that by the following year, Tesla would have “over 1 million robotaxis on the road.” However, this vision never materialized. According to four people familiar with Tesla’s retail operations, cited by Reuters, the company instead sold many of these off-lease vehicles to new buyers, capitalizing on their high resale value.

This reversal highlights Tesla’s challenges in achieving full self-driving (FSD) technology. Despite Musk’s promises—made annually since 2016—that autonomous Teslas would arrive within a year, the company has yet to deploy a functional robotaxi fleet. A 2019 statement to podcast host Lex Fridman, where Musk claimed autonomous software would make every Tesla an “appreciating asset,” also fell flat as the technology lagged.

Technical Upgrades Boost Resale Value

Tesla enhanced the resale value of these leased vehicles through software upgrades. For instance, the company added its Full Self-Driving package, which sold separately for up to $15,000, and the “acceleration boost” update, priced at $2,000, to many off-lease cars. These features, which improve performance and enable advanced driver-assistance capabilities, made the vehicles more attractive to new buyers. However, this practice frustrated some lessees, like Joe Mendenhall, who told Reuters, “I was not able to buy out my lease … the car gets sold at auction, not turned into a robotaxi like I was told.”

Industry Trends and Sales Challenges

The decision to sell off-lease vehicles comes amid declining demand for used Teslas and rising competition in the EV market. An analysis by CarGurus, referenced in the Reuters report, shows that average selling prices for used Teslas dropped 7.6% over the past year, compared to a 0.8% decline for a composite index of all brands. Specifically, prices for Tesla’s Cybertruck fell 46%, while Model Y prices decreased by 14.1%. Globally, Tesla’s sales in the first quarter of 2025 plummeted, with declines as steep as 62% in Germany and 30% in Norway, though the UK saw a modest 6% increase, according to Reuters data.

This sales downturn coincides with Tesla’s November 2022 policy update, allowing lease buyouts for new contracts in North America. The company also revised its leasing webpage to state that vehicles “may be eligible for purchase,” a stark contrast to earlier policies that barred buyouts for vehicles delivered after April 15, 2022.

Implications for EV Owners and the Market

For EV owners and lessees, Tesla’s policy shift restores the industry-standard option to buy out leases, addressing years of customer frustration. However, it also underscores Tesla’s struggle to balance innovation with reliability. The company’s focus on software upgrades to boost resale value, rather than fulfilling its robotaxi vision, suggests a pragmatic pivot to mitigate financial losses amid a 4.4% share of its global fleet—over 314,000 vehicles—being leased, as per Tesla’s financial statements.

As competition intensifies and Musk’s political activities draw scrutiny, Tesla’s path forward remains uncertain. For now, the dream of a million-robotaxi fleet has been sidelined, leaving EV enthusiasts and industry watchers to question what’s next for the world’s most valuable automaker.