Tesla has dramatically slashed lease prices for its Model 3 and Model Y electric vehicles by up to 40% as the company grapples with declining sales across multiple markets.
According to reports from The Times and Reuters, the electric vehicle manufacturer is working through preferred leasing partners to offer significant discounts. The cuts allow drivers to lease a Model 3 for as little as £300 per month.
Industry sources cited by The Times point to growing competition from Chinese manufacturers and ongoing controversy surrounding CEO Elon Musk as key factors behind the price reductions.
Tesla also faces storage constraints for vehicles arriving from overseas production facilities, according to the reports.
Lease Deals Nearly Cut in Half
The Model 3 RWD standard range – which carries a list price just under £40,000 – is now available through Silverstone Leasing for £300 monthly including VAT.
That same lease arrangement cost between £600 and £700 just a year ago, representing a reduction of more than 50%.
Tesla’s updated Model Y is also seeing substantial lease reductions. Silverstone Leasing currently offers the standard range RWD variant for £463 per month including VAT, with some leasing sites reportedly offering deals as low as £450.
The company hasn’t adjusted cash purchase prices for either model. The Model 3 maintains its £39,990 starting price, while the new Model Y begins at £44,990.
Industry experts say lease adjustments provide a less expensive way to boost demand compared to cutting list prices for cash buyers.
Registration Numbers Tell the Story
Tesla’s UK registrations have dropped 7% in the first half of 2025, totaling 23,708 vehicles compared to the same period in 2024.
Meanwhile, Chinese manufacturer BYD – widely considered Tesla’s primary competitor – saw registrations surge 514% during the same timeframe. BYD’s UK lineup includes the hybrid Seal-U, though most of its vehicles are fully electric.
Polestar, another electric-only competitor, posted 150% registration growth year-to-date according to Society of Motor Manufacturers and Traders data.
The European market presents an even more challenging picture for Tesla. Sales fell 33% in the first half of 2025 to 110,000 units, down from 165,000 during the same period in 2024.
Tesla’s European market share dropped from 2.4% to 1.6% between the first halves of 2024 and 2025, according to European Automobile Manufacturers’ Association figures.
The lease price cuts represent Tesla’s most aggressive pricing strategy in the UK market as the company works to regain momentum against increasingly competitive electric vehicle offerings from both established automakers and emerging Chinese brands.
Tesla has not responded to requests for comment regarding the pricing adjustments.
