Tesla’s Model S Lease and Financing Program Expensive, Misleading

Take a look at some of the Reddit threads about the expected profits, and you highly see upvoted comments talking about the NY Times debacle as though it is something that Tesla "won".

I can't know whether Elon Musk is actually caught up in the cause of electric cars, but it increasingly passes for a explanation of strange decisions.

I think this shows that Tesla just doesn't get the market they're aiming for.

With their prices(around $60,000 MSRP for the Model S, and $90,000 for the Roadster), they're looking at car enthusiasts and rich people. They're looking at an informed audience that will see through(or are capable of paying people to see through) the marketing to the direct impact on their bottom line. They're informed customers, and don't need this kind of marketing. The key points here was that they've gotten a bank to issue loans on the cars. That's all they needed to announce, not the terms or the nebulous "Total cost of ownership" calculation.

If we can assume he knows nothing about this ad then we can assume he will fire the people (and/or agency) involved in this advertising black eye.

If they pitched the calculator on the "true cost of ownership" page as a "here's a way to estimate the hidden costs of a gasoline car that make the Tesla more competitive than you'd think" they could make the same pitch but without the smell of a bait and switch. But even at that, it's not apples to apples (if you buy an S Class, nobody has to guarantee that there will be a market for reselling it in three years).

I mean is electricity free in the US?

I'm gambling that they're eventually going to release one within my price range in the next five years. This financing program would make getting into a Tesla doable but I am not a big fan of leasing.

Similarly the buyback is only for a very short window of ownership. It'll be interesting to see how they remind owners of this window - will it be months in advance, or will it be "Hello, as of today..."?

Looking at it, it's Tesla that failed to emphasise these benefits properly.

For a firm that is supposed to be innovative and disrupting the industry, this "deal" looks like standard car salesman fud. The only innovative thing is the buy back scheme, which is a little lost beneath the $500 stuff.

They'd be better off saying; look, the Tesla S will cost you ~£1,000 per month, but based on what you've entered the best alternative you could have would be $600/mo car, with $400/mo fuel cost (maybe pick some example cars in that price range to compare against directly). And emphasise the ability for you to get a premium car for your money.

In fact; this true cost of ownership thing could have worked if they hadn't stamped a big $500 on the front of it.

I understand why they have done it this way - fuel costs aren't a fixed cost for most people (by which I mean, you probably couldn't recall offhand exactly what you pay per month, or when you pay it) and so is a cost which people don't appreciate as much as their credit lines. But, still.

No, it's really not.

If I'm paying $1200/month for a BMW, and the cost of gas+maintenance is $400/month(ballpark), then my total cost per month is $1600.

If I'm paying $1200/month for a Tesla, and the cost of maintenance comes out to $200/month, then my total cost per month is $1400. The cost of gas should not be subtracted from the Tesla's cost, because that cost is $0. It can be used as a comparison point between the BMW and the Tesla, in which case the BMW does cost $200 more per month than the Tesla, but it absolutely cannot be subtracted from the Tesla's cost.

That's why, in order to get to the $346 figure I'm seeing on loading up the page with the default options for the 60kWh model, most of the "savings" comes from stuff other than the buyback (primarily the business tax benefit and fuel costs). The guaranteed resale value portion is only credited a $40/month benefit.

Is there a question though?

Max battery + all options including wheels and leather, except "pain armor" and probably "rear facing child seats".

Roof is tricky, don't know it it's a good idea or not.

In this case I think Tesla went too far with their claims and the market (both on Main and Wall street) is punishing them accordingly. The buyback guarantee was a good idea, as is the lease scheme. Of course they want to make the price seem attractive, but I think they could have been frank about a $1000/month lease cost and got the same amount of business or even more. A surprising misstep.

This is such a common sentiment, but why? Elon Musk has helped create a number of awesome things, but that does not make him a virtuous person. His handling of the NYTimes debacle strongly suggested the opposite, in fact

I suspect it's largely because he's the figurehead for the new-age EVs which are making many people giddy with excitement in much the same way that iPods did a few years ago.

It's like saying: you spend 3000$ every month. A trip to Las Vegas would cost you an additional 1000$. But if you don't go to Las Vegas you are saving 1000$ and now your "true" spending is only 2000$ this month.

What they should have said is: non EV - car X has a monthly price of 1200$ and Tesla Model S also has a monthly price 1200$. For car X you have some additional monthly costs of 1000$ but for the Tesla, the additional costs are only 300$. So the total cost for you would be 2200$ for having car X and only 1500$ for Tesla. Or something like that.

Elon has simply come to the realization that the low hanging fruit isn't going to pull his company along far enough to get to the next expensive car, the X. That everyman car is still beyond that point and he still has to get there.

As for the lease costs, remember its your tax dollars contributing towards someone's ownership of this vehicle. While some will claim its the cost of progress I see no reason progress to rewarded excessive costs of progress. There should have been a restriction on the price of the car it was applied too, no need to subsidize luxury rides. There are many alternatives below 40k that if bought in sufficient numbers would do more for adoption

Planetary Resources. Colonization of Mars.

" the fuel savings calculator nestled among these references to the buyback program defaults to driving 15,000 miles per year. Nowhere on the page does Tesla mention that the buyback program explicitly limits mileage to 12,000 per year, and that any miles in excess are charged at $0.25 apiece ... they’d have to pay an additional $2250 in mileage penalties."

This is the type of thing you expect from a scummy used car dealer.

It's not just Car & Driver, there have been recently discussions on HN also where it's been shown many times over that the $500 figure is straight out to lunch and grossly misleading.

Why is it that some of us here feel the need to constantly worship at the feet of demigod Musk, He Who Does No Wrong, and anything negative said about him is dismissed as slanderous propaganda by Big Automobile? What is this, the USSR?

I appreciate what Elon Musk is doing to advance electric cars and wean us off of oil, but he is a shrewd businessman subject to the fallibilities of all shrewd businessmen. He is neither a messiah nor a saint.