Seeking Alpha

The actual cost of Tesla's (TSLA) Model S financing plan for its cheapest model is $1,051/month...

The actual cost of Tesla's (TSLA) Model S financing plan for its cheapest model is $1,051/month (per Tesla's site), assuming a 2.95% APR, 10% down, and a 66-month loan. To get to Tesla's estimated "true cost of ownership" of $373/month, one has to discount (among other things) $284/month in energy savings, a $222/month business tax benefit, and (amusingly) $100/month for "time spent driving to a gas station and refueling" - Tesla assumes buyers value their time at $100/hour. Shares now -2% AH.
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Comments (27)
  • idkmybffjill
    , contributor
    Comments (1734) | Send Message
    Makes sense, only someone making low to high 6 figures+ a year can afford to buy this car and keep it!
    2 Apr 2013, 06:11 PM Reply Like
  • Energysystems
    , contributor
    Comments (1655) | Send Message
    Hey Musk, pass the skunk!
    2 Apr 2013, 06:15 PM Reply Like
  • wigit5
    , contributor
    Comments (4234) | Send Message
    Of course my time is worth $100/hour I keep telling my boss but he refuses to pay me....
    2 Apr 2013, 06:16 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5834) | Send Message
    If one makes $100/hour, one could afford the car. I know the UAW got $70/hour.
    2 Apr 2013, 10:02 PM Reply Like
  • wigit5
    , contributor
    Comments (4234) | Send Message
    if I made 100/hr I could afford more than just one of them...
    3 Apr 2013, 08:15 AM Reply Like
  • Zelaza
    , contributor
    Comments (909) | Send Message
    " and (amusingly) $100/month for "time spent driving to a gas station and refueling" - Tesla assumes buyers value their time at $100/hour. "


    So using a FREE Supercharger "costs" the driver at least $100 per visit; $50 per half hour of free charging and at least $50 in time wasted to and from the supercharger. Nice.
    2 Apr 2013, 06:18 PM Reply Like
  • wigit5
    , contributor
    Comments (4234) | Send Message
    good point zelaza, unless you assume they never use those superchargers
    2 Apr 2013, 06:19 PM Reply Like
  • ThomLandon
    , contributor
    Comments (159) | Send Message
    But then you deduct the cost of driving the electrified miles since you got them without having to charge at home. (I think the assumption was $.11/kWh).


    Also, after driving 250 miles, aren't you going to stop and take a leak and have a bite to eat?
    2 Apr 2013, 06:24 PM Reply Like
  • wipster
    , contributor
    Comments (176) | Send Message
    This "Market Current" is very misleading... while the actual monthly loan payment may be $1,051, that's quite in line for a car costing a little less than $65K and all of the rest of items that help determine the TCOS are variable on Tesla's site. Maybe your time isn't worth $100/hr ... well the Tesla site allows you to change it, along with all of the rest of the variables you may have in your life and driving habits. Check out


    Frankly, I applaud Musk's efforts in working with major banks to drastically reduce the cost involved in getting one of these state of the art vehicles... very creative, just like the rest of the things all of his companies do. I am sick and tired of people screaming for entrepreneurs, then tearing down everything one of this era's true entrepreneurs does. Thanks and GO ELON!!!!


    Definitely long Tesla...
    2 Apr 2013, 06:33 PM Reply Like
  • Randy Carlson
    , contributor
    Comments (2221) | Send Message
    Tesla has put in place a good, solid financing facility for their rather expensive cars. Tesla, backed up by Elon Musk, personally, have added a 3-year residual value guarantee that further strengthens the Model S value proposition for buyers beyond 'first adopters'. Taken together, these things can only dramatically expand Tesla's near-term market. Hope they have plans to expand the Fremont line...


    That said, Elon Musk gave the excitement and 'hype' angle of this announcement every bit of what it deserved - and maybe a bit more. But that hardly constitutes news and had he not, shareholders would no doubt be concerned that he was 'coming down with something' or otherwise 'off his feed'...


    There is an implication to Tesla's commitment to take back / trade in Model Ss at 3 years that wasn't talked about, and that is that Tesla is headed to be a 'used car dealer'. I don't know if this will make them tons and tons of money, but it is just one more thing to drive the car dealer associations absolutely crazy...
    2 Apr 2013, 06:54 PM Reply Like
  • pvenkate
    , contributor
    Comments (954) | Send Message
    Help me out here. What is this residual value on par with an S class Benz? Is that a number after applying 3 years worth of depreciation on the said car? I need a number for 60kw and 85kw models.
    3 Apr 2013, 12:02 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5834) | Send Message
    Someone on another thread said an S class is $90,000.
    3 Apr 2013, 12:16 AM Reply Like
  • Randy Carlson
    , contributor
    Comments (2221) | Send Message
    What Musk said on the conference call was that they would pay 43% of initial value after 36 months. (I assume with the normal adjustments for any excess wear / mileage, etc.)
    3 Apr 2013, 12:39 AM Reply Like
  • Gu Na
    , contributor
    Comments (33) | Send Message
    It's 43% of the price of the car (full price, not the tax- and incentive-deducted price) if mileage is below 36.000. Every mile above 36.000 will deduct the price Musk pays by 0,25 USD.
    3 Apr 2013, 01:51 AM Reply Like
  • stealthology
    , contributor
    Comments (351) | Send Message
    SeekingAlpha editors are short Tesla, lol.
    2 Apr 2013, 08:44 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
    The 1051 a month is pretty decent considering, It is on par with other cars in the price range.


    Just a little food for thought. I had a car that was 18 K, was paying 318 a month, put 10% down, and was speading $200/month in gas.
    It was for 5 yrs, but the 6th yr, still would have the $200/month gas bill and would be paying that forever.
    The car is substantially more than 18 K, that just puts it in perspective.


    As far as the $100 per hr, think of it as free time, not as an hourly wage, or double time, or time and a half. Ask a parent how valuable an hour of free time is worth.
    2 Apr 2013, 09:21 PM Reply Like
  • Vico Confino
    , contributor
    Comments (233) | Send Message
    Vico Confino: owner of 2 Tesla S sedans
    You heard of a woman's right to change her mind?
    Well mine did!
    She does not want her Tesla S.
    Would rather keep her present auto.
    We are married 40 years and I learned the two words to keep a
    woman happy. Yes dear.
    If you don't want to wait 10 months for a Tesla S sedan with all the
    goodies, let's talk. Only 28 miles on the odometer.
    2 Apr 2013, 09:43 PM Reply Like
  • Surf Dog
    , contributor
    Comments (826) | Send Message


    Sorry to hear she won't be keeping her Model S. What is the car she prefers?


    28 miles, that's pretty cherry.


    I'm holding out for a Model X.
    3 Apr 2013, 02:59 AM Reply Like
  • ZBNW
    , contributor
    Comments (138) | Send Message
    However you look at it Musk is in the business of making formerly unattainable tech more available for more people. Plus this special lease allows the better leveraging of the tax rebates for the consumer rather than the banks yes? I see them instead refurbishing these cars and reselling them for a profit again. People have to get inside one, touch it and sense it, these are not like any other mass produced American cars, instead they feel like they will last, much like an S Class Mercedes. The model X could be the real winner from this approach IMO.
    2 Apr 2013, 10:18 PM Reply Like
  • klgmdc
    , contributor
    Comments (296) | Send Message
    Musk is a true visionary. He consistently defies contemporary logic to blaze a new path to the next future truth. I applaud him for gaining the backing of financial partners to put more people into his vehicles. Do you think he's going to sit on his hands and "wait" for the rich to make their down payment? No. He's going straight to where our subliminal desires lie in the unconscious. He's making his cars "affordable" on a layaway plan. America loves layaway. But now; pay later. Strip this brilliant play down to its basic simplicity. Long TSLA.
    2 Apr 2013, 10:42 PM Reply Like
  • wigit5
    , contributor
    Comments (4234) | Send Message
    lol "buy now, pay later"
    3 Apr 2013, 08:19 AM Reply Like
  • Mr Investor
    , contributor
    Comments (3156) | Send Message
    The TSLA hype is a classic short opportunity. Charismatic leader + cool product = irrational long investors. The more, the better. Fattens the pig before the you-know-what.


    The only questions for experienced investors are, when does the bubble burst, and how to play it?
    3 Apr 2013, 02:03 AM Reply Like
  • silvercygnus
    , contributor
    Comment (1) | Send Message
    After all of the hype, I am somewhat disappointed with the actual terms and/or costs of leasing a basic S Model. Still covet the Roadster and like TSLA long, but I do not feel that this will expand their consumer base as expected or add stock value in any corporeal way. We shall see.
    3 Apr 2013, 02:08 AM Reply Like
  • Energysystems
    , contributor
    Comments (1655) | Send Message
    Why not just buy a Lotus?
    3 Apr 2013, 09:24 AM Reply Like
  • wolfinlaw
    , contributor
    Comment (1) | Send Message
    I am absolutely with you on this wipster. I am so tired of these whiners picking at everything that Tesla and Musk have done. They were also probably ridiculing the concept of PayPal, and rolling their eyes at the idea of a private company doing space launches. I have a Model S and think it is absolutely the best car out there. After I drove it, I believed it was a revolutionary car and an extraordinarily innovative company and decided to buy (for me) a fairly large chunk of stock. I have not regretted it at all (have probably paid for my car by now). I think if any of the naysayers would actually drive the car, they might change their tune.
    3 Apr 2013, 02:34 AM Reply Like
  • swartluiperd
    , contributor
    Comments (3) | Send Message
    Well done Tesla - Elon jy kook!
    3 Apr 2013, 05:19 AM Reply Like
  • WabiSabi
    , contributor
    Comments (3) | Send Message
    Step by step Tesla and Solar City will spread solar power to the highways and homes effectively saving money and spending money - a break even at the beginning - but over time solar becomes a means of freeing people from the sticky gum on your shoe oil companies and utilities.


    Step by step.
    3 Apr 2013, 06:16 AM Reply Like
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