Tesla is teaming up with Wells Fargo and U.S. Bank to offer shoppers a part-lease, part-finance option that guarantees the residual value of the all-electric Model S. The automaker says in a statement that this lets buyers take advantage of government tax credits of anywhere from $7,500 to $15,000, depending where you live, which buyers can’t do when leasing.
The 60 kWh Tesla Model S starts at $69,000 and the 85 kWh model starts at $79,900 (the 40 kWh model is no longer available). The 85 kWh Model S Performance starts at $94,900. According to Tesla, you make a 10 percent down payment and Wells Fargo or U.S. Bank will finance the Model S, if you have good credit. Tesla says that the down payment will mostly be covered by the federal and state tax credits. You then, in essence, lease the car for three years. At the end of that time, you can either buy it or sell the car back to Tesla for the same residual value of the Mercedes-Benz S-Class, which Tesla CEO Elon Musk personally guarantees.
Tesla has created a “True Cost of Ownership” calculator where potential buyers can see what a Model S will cost them per month, based on multiple customizable variables. Tesla touts a potential $500 a month payment, but many in the industry are skeptical. Tesla’s low monthly payment takes into account gas savings, tax credits, a business tax deduction if you drive the car for work purposes, a deduction for the guaranteed resale value and even a monetary equivalent for the time it takes you to drive to a gas station to fill up and the time savings if you drive in the car pool lane, which many localities allow electric cars to do. The actual monthly payment could be more than $1,000 a month for the 85 kWh model. MSN Autos writes, “Residual value of the S-Class is just under 50 percent at best, and that $500-per-month number is ripe for ridicule in the face of what is actually a $1,199-per-month financing program for 66 months.”
The Washington Post cautions that shoppers should always thoroughly research any finance deal before signing on the dotted line. “Still, the financing scheme is interesting and worth exploring.”
The automaker is trying to recover from a less-than-flattering New York Times review of its Model S, where the driver ran out of battery power earlier than expected. Musk told Reuters that a few hundred buyers cancelled their orders for the Model S because of the New York Times review, and that the company’s stock shares dropped 13 percent. “Between $100 million and $200 million of Tesla's drop in market value was due to the Times article,” Musk told Reuters.
MSN Autos reports that the 40 kWh model was dropped due to low sales. “Making up only about 4 percent of Model S orders, the 40-kWh version is now seen as extraneous compared with the more popular, higher-range 60-kWh, 85-kWh and 85-kWh Performance versions.” MSN Autos also reports that Tesla sold more Model S cars than it expected in the first quarter, which helped the automaker earn its first profit.
The 2013 Tesla Model S is currently ranked at the top of our luxury large car class, tied with the 2013 Mercedes-Benz E-Class.
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