Electric car maker Tesla Motors announced on Tuesday that it will offer a leasing option to future Model S customers. Tesla is working with Wells Fargo and US Bank to provide financing for 10 percent of the cost of a Model S, and following monthly payments, after 3 years customers who choose this option can sell the car back to Tesla at a predetermined price.
Tesla will guarantee the resale value of the three-year-old Model S (at the same price as a Mercedes S Class), and Tesla CEO Elon Musk said he will personally stand behind the guarantee. The monthly payment for the three-year term could be between $500 and $600 per month, and Tesla says the tax credit can cover the upfront cost in many markets. Already some are pointing out that it could be much higher than that.
Musk has been talking about the potential for leases for awhile. In the company’s earnings call last month Musk said that in 2014, “leasing will be a big factor” in the U.S., and will be a moderate part of revenue in 2013 in Europe.
Customers who accept the leasing deal can also decide to own the car after the three-year period. If customers want to keep the car after three years, they can continue to make the monthly payments and would own it around year five, Musk said on the call.
The financing option is sort of a hybrid between leasing and ownership, and Tesla describes it as “a new kind of financing product that combines the surety and comfort of ownership with all the advantages of a traditional lease.”
The leasing option is interesting because it could help more mainstream car buyers, and customers that don’t want to put down as much money upfront to purchase an electric car. Leasing deals have helped deliver solar panels on rooftops, and a third of the new solar panels installed in 2012 were owned by third parties.
We’ll update this with more information from the company’s call this afternoon.