Today's lease announcement was anticlimactic

[Norbert]

Wait, so unlike most leases, there won't be an option to purchase the car at the end of the leasing term? I like that leases give me the option to walk away but if I really like the vehicle, perhaps I'd like to keep it. Would there be an option to pay the residual value?

I think Elon said in the Q&A that you can buy the car at any time during the term.

i think this forum hyped it up, not elon

Although I found it much more "exciting" that Tesla become *really* profitable, I have to say that this is important. According to an CNN article, "about half of all luxury car customers lease their cars rather than buying them". So it is in fact very significant that Tesla is now able to offer a financing deal which combines advantages of a loan and a lease.

 

[Doug_G]

Under my nose... Dashboard? Steering wheel? Touchscreen?

 

[alexkiritz]

Under my nose... Dashboard? Steering wheel? Touchscreen?

Isn't the sun visor closer to nose level? It's probably a new visor.

 

[jigish]

Under my nose... Dashboard? Steering wheel? Touchscreen?

I've got it. Tesla is partnering with Google: http://www.google.com/landing/nose/

Boom.

 

[Beavis]

I have to say that I totally agree that this wasn't that exciting for us but very big for the company's long term success. A car this expensive needs a lease option.

 

[juan]

Maybe battery related.

 

[Doug_G]

Maybe battery related.

Uh, that's under my butt.

 

[orlando]

letdown for sure. and the $500/mo thing is insulting.

 

[Norbert]

3 mor announcements coming. During the Bloomberg West interview at 6:30EST, Elon said one of the announcements is right under current owners nose.

Bloomberg interview: Elon Musk on Tesla Model S Financing: Video - Bloomberg

 

[Alexander]

Im sorry, but is this really a lease? 66 Months? This feels more like a loan...

Even in their calculator they say "66-month term loan"

Thoughts?

 

[Larry Chanin]

I think this could have been positioned to be a positive announcement. However, after sifting through the fluff the whole thing comes across as very misleading and unprofessional to me.
I like the idea that they are trying to get creative to expand the base of potential buyers, and that Elon is personally backing the residual guarantee. But the positioning of a monthly cost for the loan (it is NOT a lease) at $500 will (I think) turn a lot of potential buyers off and end up feeling a bit slimy to many after they realize what their true monthly outlay will be. Ironically, if the actual monthly payment amounts had been disclosed up front, and then the discussion about potential savings, I think many might be potentially swayed into the tent. What a shame.

I agree. This is an unfortunate way to present this financing plan. This is an important development in sustaining continued demand. However, while technically accurate the outline in the press release nevertheless tends to mislead. When the folks looking for that $500/month "lease" actually use the Effective Monthly Cost calculator and see what the true upfront costs are going to be, prospective customers can't help but being disappointed when comparing the results to that $500 number.

Larry

 

[ToddRLockwood]

I think it's a brilliant plan for Tesla. It lowers the barrier to entry and solves a few other problems. The issue of battery replacement becomes moot with a leased vehicle. People will be less concerned with resale. Even at $1,000/month, there is a large currently-untapped market for the Model S.

 

[ebwb]

Im sorry, but is this really a lease? 66 Months? This feels more like a loan...

Even in their calculator they say "66-month term loan"

Thoughts?

Nope, not a lease. But after 36 months with this 66-month loan (at 2.95% APR and 10% down), the principal balance and buy-back price are nearly the same. In other words, you can "turn in" your car, as you would with a lease, without penalty.

In this sense, the effective "lease" price for a base Model S with "$0 effective down payment" is $1,044/month + tax over 36 months, 36,000 miles.

$71,070 base Model S finance
$7,500 down ($0 "effective" down after tax credit)
$1,044.61/month

After 36 months:
$30,175 principal balance
$30,560 buy-back

 

[Longhorn92]

Im sorry, but is this really a lease? 66 Months? This feels more like a loan...

Even in their calculator they say "66-month term loan"

Thoughts?

Yes, it's a loan. You own the car, you get the federal tax rebate, you have the option to sell back after 36 months (but no requirement to and no end of "lease" purchase price). If you do sell back, you have to pay off remaining portion of loan. If you don't sell back, you still have to continue to make loan payments.

Semper Fi.

 

[constraint]

Honestly I think this announcement hurts Tesla and Elon's credibility. The $500 lease number that they threw on their website is the fuzziest math I have ever seen in my life. Assume you live in the 5 states that give extra incentives and assume you buy this and have a business to take that tax credit from? Not to mention then its a calculation of money you will save in gas vs electricity? Or a calculation of time you save by not going to the gas station for 5 minutes (as opposed to waiting several hours on a 30 amp 240 line {SC's are not in the area for 3 more years}).

Spare me the hype because people are not that stupid to see through the BS. Give them a real number to make their decisions on.

 

[anticitizen13.7]

I think that many of us want Mr. Musk to have the same level of showmanship as the late Steve Jobs. Especially since Tesla feels like the Apple of the auto industry in many respects.

In many ways the parallels are there between Jobs and Musk: young boy wonders, tech industry billionaires, running multiple world-changing companies, both with flares for the dramatic. But whereas Steve was a world class showman and presenter, Elon's skills in this area leave much to be desired. Watching fairly boring videos of truly incredible product introductions like the Superchargers and the Model X, I can't help but wonder what they would have been like with Steve's showmanship on display as well.

Elon Musk seems to "think" on a different dimensional plane than most people, and I can't help but wonder if this is the reason something he finds "exciting" (the lease plan), comes off as "meh" to a lot of us, me included. I can see why the lease plan matters in the long run, but it doesn't fire me up like the Superchargers did. Mr. Musk's soft spoken-ness and occasional stuttering are perhaps not good in terms of presentation, but that's the guy's personality, and honestly, I think it's better that he's distinctly unique from Steve Jobs.

Steve Jobs was also utterly crazy and out of control as a young man. Charisma or no charisma, that's not the kind of personality I'd want running a company where the products have life-critical functions. It's one thing if a Mac goes bonkers, and quite another if a Tesla w' a driver goes bonkers, or a rocket on the launch pad goes bonkers.

 

[Joyrider]

I suspect that those who think this announcement was anti-climatic already have their cars and had the means to buy a Model S without stretching their finances. For those of us looking to lease I find this to be a very attractive offer as I believe it is the best of both worlds (leasing & owning.) Also, for current owners, this guarantee of resale value should put to rest any concern about how well the car will hold its value. The thing that does annoy me is how Tesla is s-t-r-e-c-h-i-n-g the numbers in really an unrealistic fashion. I believe the offer is attractive enough without the tortured arithmetic which is beneath what Tesla otherwise does as a company.

 

[StephRob]

I guess I'm the Debbie Downer here. I think this could have been positioned to be a positive announcement. However, after sifting through the fluff the whole thing comes across as very misleading and unprofessional to me.
I like the idea that they are trying to get creative to expand the base of potential buyers, and that Elon is personally backing the residual guarantee. But the positioning of a monthly cost for the loan (it is NOT a lease) at $500 will (I think) turn a lot of potential buyers off and end up feeling a bit slimy to many after they realize what their true monthly outlay will be. Ironically, if the actual monthly payment amounts had been disclosed up front, and then the discussion about potential savings, I think many might be potentially swayed into the tent. What a shame. I'm going to the garage now to plug Nicoletta in and then head for the shower. Just can't shake this yucky feeling.

Completely agree. I think the "math" with the time/money saved by not filling up and driving in the HOV lane is simply embarrassing. Big marketing/PR blunder on Tesla's part. Hurts credibility and it really didn't have to be that way. Just be honest and upfront with people and let them make their decisions. The availability of a lease-like purchase and Elon personally guaranteeing would have been enough of an announcement without this $500/month BS.

 

[herbvdh]

I do not quite call it fuzzy math. I see where they are coming from. $500 + Money saved on Gas vs. Electric about $200, Maintenance charge difference $175, Federal rebate avg. $7500 lump sum about $113 a month over 66 months. If you don't like the car your buy back price is guaranteed.

 

[gregincal]

It's funny, but on the "awkward questions about how much the car costs" thread everybody was saying how important it was to stress to people the total cost of ownership, and not just the bottom line price. That's what Tesla is attempting to do. I agree they may have gone a bit overboard, however.