Tesla announced it’s now offering U.S. lease prices on Model S at up to 25 percent less, and these come with a 90-day “happiness guaranty” to let customers return the car if not satisfied.
The automaker that is known for zigging when everyone else zags says its low lease rate is thanks to US Bank which has significantly reduced costs of capital than does Tesla.
A base level 60-kilowatt-hour Model S starts now at $777 per month with $6,477 due at signing. A simplified online lease form lets buyers sign up for a new Tesla starting at $71,070 with little more complication than selecting any other online product, says the automaker.
And, perhaps even as good or better than some large consumer products, the automaker is innovating with a return policy, as its blog post from Saturday says:
If you don’t like our car for any reason in the first three months, you can just return it and your remaining lease obligation is waived. The only catch is that you can’t then immediately lease another Model S. Upgrading early is no problem if you want to do that, but there is a pass-through fee to cover the new vs used value difference.
An article by the Wall Street Journal suggests Tesla is doing the price drop to compensate for a 26-percent decline in sales over the past nine months, and to keep its up-till-now sales pipeline full.
Tesla did not respond to the Journal’s inquiry on that theory, but the Journal noted CEO Elon Musk has previously blamed flagging U.S. sales on supply constraint as it ships cars to Asia and Europe.
And this latter scenario is most likely correct. Tesla is limited for production, and is shipping cars as we’ve reported on our monthly sales Dashboards this year.
As for the provision forbidding immediate repurchase, the WSJ suggests this likely touches on some disgruntled Tesla owners who just purchased Model S sedans as Tesla was implementing upgrades including autopilot and all-wheel-drive.
Had they known, they might have waited, some said. Anecdotal accounts are floating out there of new Model S owners who took the car only to find the updates were pending, and they could not return their cars – and, it’s been said, they were never warned by Tesla personnel that a new-improved model was around the corner.
Tesla does not make formal model year changes as do conventional automakers, and it updates vehicles when feasible any time during the year. The upside to this is those who get the upgrades benefit, but those who do not, might miss out.
To its credit, Tesla is taking a chance with the 90-day return policy. Automakers have attempted such programs before, but after initial interest waned, they canceled them.
As car buyers know, any new car that rolls off the lot – or in Tesla’s case, is accepted under its non-franchised sales model – depreciates significantly once it’s “out the door, over the curb.”
Tesla’s hybrid lease program had already let buyers “put” the car back to Tesla after 36-39 months, and itself constituted a mitigated, underwritten, calculated risk.
Since Tesla began selling Model S, it has sought to remove objections to going with its EVs.
Through Superchargers offering “free” electricity, and resale value guaranties, to service centers that try to offer zero profit and more, Tesla has attempted to reduce potential anxiety for buyers of its new technology car.
It would appear the latest innovations are just more in a series of such incentives as the automaker moves forward.