On the cusp of the launch of the Tesla Model S electric car today in Fremont, CA, Tesla Motors and Wells Fargo announced a deal in which Wells Fargo would offer new car financing for Model S purchasers. The non-exclusive deal increases the options for prospective Model S purchasers, and marks the first major financial institution to back financing for the Model S.
The Tesla Model S is the worlds first premium luxury electric car. It is a five-door sedan, that offers up to three rows of seating, cargo space galore, with the handling and style to match the worlds top cars. As an electric car it provides 265 miles of electric driving range, a flexible charging system to make it the first electric car to be capable of proper road trips. Because it doesn't have an engine, the front compartment is available as for cargo, as is the normal trunk area, leaving the full interior of the cabin available for passengers. With an EPA rated 88 miles/gallon equivalent fuel efficiency, and driving performance equaling some sports cars, it is a highly technologically advanced vehicle. Today marks the first deliveries of the Model S electric car to retail customers.
With a base price over $77,000 for the 85 kilowatt-hour (265 miles range) version of the Model S, clearly purchasers will often require financial help to pay for the car. “Affordable financing for electric vehicles is incredibly important as it provides our customers the ability to combine their monthly payment with monthly operating costs and realize the economic benefits of an electric vehicle from day one,” said Elon Musk, Tesla Motors co-founder, CEO and Chief Product Architect. “Because the cost of electricity is significantly less than the cost of gasoline, the value proposition to customers on a purely economic level is going to be much more compelling than an internal-combustion powered vehicle.”
Electricity is a very efficient fuel that, per-mile driven, is cheaper than gasoline to drive the same distance. This, and the smaller maintenance requirements, turns into savings on the operational cost of owning a car. However, do the savings add into enough dollars to pay for the premium price of the Tesla Model S?
The actual rate, terms and down payment requirements will vary based on individual credit ratings. Model S customers who obtain retail financing may also qualify for state tax credits, rebates, sales tax exemptions, free parking, commuter-lane passes and other perks.
Tesla Motors projects selling 5,000 units this year, and ramping up to 20,000 in sales of the Model S during 2012, as well as launching the Model X electric SUV during 2013. While the company is currently running steep losses, Elon Musk has claimed that Tesla will be "cash flow positive" on sales of just 8,000 Model S electric cars per year.
“We’re proud to support the deployment of Model S as part of our efforts to accelerate a transition to a ‘greener’ economy via finance,” said John Adams, Wells Fargo’s executive vice president of Commercial Banking. “Together, through our actions and everyday decisions we can make a difference.”