Tesla Revises Financing Plan

by Derek Kreindler

May 6th, 2013 11:28 AM

Tesla is changing course with its lease/financing plan, with CEO Elon Musk tacitly admitting that Tesla got it wrong the first time around.

Initial calculations of the Tesla “lease” program included some overly optimistic values for things like gas prices as well as how much one’s time was worth (and this, how that could be saved by not having to fill up with gas). According to Wired magazine, the new calculator is much more grounded in reality, with Musk describing the changes himself

“Everything except gas prices are off by default on the new payment calculator on the website…We’ve changed the defaults to be more conservative. [In the original calculator] we included too many non-financial elements.”

Tesla has also managed to extend the financing terms from 63 to 72 months, while Musk’s resale value guarantee has now been extended to be better than “any premium sedan made in volume,” with low volume high performance models specifically excluded.

#Finance #Lease #Tesla #TeslaModelS

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11 comments

SCE to AUX on May 06, 2013

The resale value may be still dubious, but at least Tesla is showing that it's a learning organization.

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Nicholas Weaver on May 06, 2013

Having a realistic calculator is a big improvement [1] And the residual guarantee is actually pretty interesting. The S-class/7-series/A8/Jag depreciate like stones, so I have a feeling this will cost Tesla nothing: the only way I'd see a Model S depreciating faster in 3 years is if Tesla went bankrupt, so the guarantee would be worthless anyway. [1] Although a much bigger would be talking to Kawasaki or Yamaha about designing and building a $5000, 40 hp generator/range extender for the frunk. If they did that, I'd have my order in for one.

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- See 6 previous
- Scoutdude on May 06, 2013
  
  $5000 that would generate some huge profits.
  
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- Nicholas Weaver on May 06, 2013
  
  @Scoutdude Not TOO much: You're talking something in volume and technology about equivalent to a 500cc motorcycle. Where the profit would come from is WITH a range extender, the Model S could easily kill the S-Class, 7-series, A8, etc as an all-around car, and would come dreadfully close to hurting the E-class, 5 series, etc...
  
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- Mcs on May 06, 2013
  
  @Nicholas Weaver " WITH a range extender, the Model S could easily kill the S-Class, 7-series, A8, etc as an all-around car" Do you have any marketing research do back that up? For distances beyond the range of a Model S, most people I know, including myself, would fly or put the miles on a rental (usually free because of accumulated points) rather than use any personal car, ICE, or electric. For me, if a Tesla was my only car, my Hertz on-demand key fob and an airplane are the only range extenders I need.
  
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- CJinSD on May 06, 2013
  
  @Nicholas Weaver Would the range extender come with a roof rack for the luggage that would be displaced from the trunk? Nothing says luxury like a roof-top carrier.
  
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- Wumpus on May 06, 2013
  
  @CJinSD Or you try to take out half the batteries and cram it in there. Working around an existing platform is always much more of a pain than when they started with a clean sheet of paper.
  
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- Healthy skeptic on May 06, 2013
  
  @Nicholas 40hp to push a 4000+ lb car? (Actually, with a generator it'd probably be a 5000+ lb car.) No thanks! Tesla was right to leave out the range extender and concentrate or performance. You can have a range extender, and you can have high performance, but not both. Fisker proves that.
  
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- Luke42 on May 07, 2013
  
  @healthy skeptic It doesn't need to push the car. It needs to match the car's average energy usage. The battery provides energy for acceleration, which is slowly charged back after you let off the gas. A 40HP engine running at WOT is.probably about right for a big car on the highway. My ScanGage estimated that my old Ranger used 20-something HP on the highway. It had a curb weight of about 3300lbs and truck-like aerodynamics.
  
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Scoutdude on May 06, 2013

How does the value of one's time, or gas prices for that matter, affect the lease rates and financing? Sure the price of gas affects the potential savings in operating cost vs an ICE powered vehicle but that is independent of the cost of the vehicle, residual value and interest rate/money factor.

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- Luke42 on May 07, 2013
  
  It doesn't. If you're as busy and rich as Elon Musk, then it effects your personal bottom line. It may also be true for some of just customers. The rest of us just make time for household chores and don't worry about it too much.
  
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