Tesla just announced that it has created a new automotive financing product that "combines leasing and ownership."
Here are the claims, according to the announcement:
- U.S. Bank and Wells Fargo have agreed to provide 10-percent-down financing for purchase of a Model S (on approved credit).
- After 36 months, the customer "has the right, but not the obligation, to sell [his or her] Model S to Tesla for the same residual value percentage as the iconic Mercedes S Class, one of the finest premium sedans in the world, made by Daimler (also a Tesla partner and investor)."
So basically, Tesla is guaranteeing the resale value and setting a floor for depreciation.The calculator on the site
claims a buyer can get down to a payment of $500 per month depending on tax credits, geography and other factors.
Here's a video of Musk explaining the lease, calling it "the world's best financing product:"
Elon Musk, CEO Of Tesla and SpaceX and Chairman of SolarCity, hinted at a big announcement to be made this week. Musk used Twitter to get the word out, as well as to walk back his original target, presumably upon hearing from all sorts of legal counsel.
Really exciting @teslamotors announcement coming on Thursday. Am going to put my money where my mouth is in v major way. — Elon Musk (@elonmusk) March 25, 2013
Slight change of date to ensure no end of quarter distractions -- will be Tues next week. — Elon Musk (@elonmusk) March 26, 2013
It also turns out that Musk is a Douglas Adams fan, (not a big surprise):
Today's Tesla announcement is actually the 2nd in a 5 part trilogy (love Douglas Adams) — Elon Musk (@elonmusk) April 2, 2013
This weekend, Tesla Motors announced that sales of its Model S targets exceeded its target of 4,500 units by 250 cars. According to Tesla, as a result, "Tesla is amending its Q1 guidance to full profitability, both GAAP and non-GAAP." Tesla also announced that it will enter the NASCAR Sprint Cup Series in 2015, according to Edmunds.
Tesla also eliminated the 40-kilowatt-hour battery pack option from its model line. The 40-kilowatt-hour battery pack is the smallest option for the Model S, and according to the company, "only 4 percent of customers chose the 40-kWh battery pack, which is not enough to justify production of that version." Tesla is a luxury car with a six-figure price tag, despite the company's mass-market protestations to the contrary -- and luxury car owners want a driving range greater than the 160 miles provided by the 40-kilowatt-hour battery.
Here's how Tesla stock is reacting: