Tesla Unveils Business Leasing to Boost Model S Sales
NEW YORK ( TheStreet) -- Tesla Motors
The move is seen as trying to boost Model S sales, as the popular electric vehicle becomes more and more mainstream. Announced in a blog post , Tesla's new business leasing program is easy to use, allowing customers to figure out the cost of their monthly lease right on Tesla's Web site. That marks a change from the company's initial financing program offering additional savings such as business deductions.
According to Tesla, the announcement "completes a suite of products, including the Resale Value Guarantee and loans from our banking partners, that covers a comprehensive range of financing needs for Model S customers. These financing options, when combined with the fuel savings of Model S, provide an attractive value proposition compared to what's available for a gasoline-powered car."
Tesla shares were slightly lower in pre-market, falling 0.44% to $206.60, following the announcement.
In an interview with TheStreet last year, Tesla CEO Elon Musk noted the initial financing program was crucial to hitting the company's stated goal of 20,000 Model S deliveries. In announcing the company's fourth-quarter and full-year results, Tesla said it delivered 6,892 Model S units, on its way to surpassing 20,000 Model S deliveries. For 2014, Tesla said it expects to deliver "over 35,000" Model S units.
Tesla's consumer lease is 72 months, lowering the cost of the monthly payment. When the company tweaked the program in May 2013, Tesla said it will cost $580 per month for a personal consumer to own the car, taking into account only gasoline savings. At the time, Tesla said if a business owner purchased the car, the cost will effectively be $315 per month, assuming 70% of the miles are for business use. The effective cost of the lease is $800 per month, vs. $1,100 per month when the financing plan was initially announced.
In the updated leasing announcement, Palo Alto, Calif.-based Tesla noted the cost would be figured out on the company's website, indicating business owners effective cost may vary from the $315 per month figure quoted in May 2013.
Tesla continues to try and make its policies user friendly for those interested in the Model S, noting the company's lease agreement is 3 pages, compared to 10 pages for other leasing agreements, though Tesla did not specify a brand or kind of car with a 10 page agreement.
As Tesla continues to push the electric vehicle age forward, it's making use of technology for its leasing program. "In keeping with the Tesla way of doing things, our customers can handle and sign their lease agreements completely electronically," the company said in the blog post. "Customers are able to view an electronic version of the lease agreement upfront before delivery. Even the signature process at delivery is simple: a one-button tap on the 17-inch touchscreen in their new Model S is all it takes."