Today during a media conference call, Tesla Motors answered the mystery people have wondered about since CEO Elon Musk tweeted last week he would make a “HUGE ANNOUNCEMENT” and “put my money where my mouth is.”

And here it is: Tesla will offer the Model S electric sedan for purchase in the U.S. via a unique 66-month financing program with as low as 2.95 percent APR that has “the best elements of leasing and ownership,” said Musk.

After 36 months, a buyer may turn the car back in and be guaranteed payment for it by Tesla in an amount that’s no less than the residual value of a Mercedes-Benz S class. Musk said he would personally guaranty the car’s buy-back amount with his own funds, if needed.

His net worth is estimated in the billions, and he broached the notion others have suggested that Tesla could go out of business, or the electric car’s value could plummet, but these are being guaranteed against by the company, and its principle officer.

Presently, the residual value for a Mercedes S-Class is about 43 percent of the selling price, and Musk said Tesla expects the Model S to actually be worth more than that.

The way the program works is, assuming a customer’s credit approval, the arrangement through US Bank and Wells Fargo requires 10 percent down on the purchase price of a Model S.

Using a hypothetical $70,000 Model S, Musk estimated net out-of-pocket costs in the neighborhood of $500 per month. He said depending on the situation, it could be “quite a bit” less than that.

We’ll note it could also be quite a bit more, but individuals will have to determine this based on how they calculate ownership costs, and whether the more expensive models are chosen. An option-packed 85-kwh Model S can escalate to $120,000 including all taxes and fees, but Tesla accentuates the positive aspects of the proposition.

Note default cost per hour Tesla says one could save by not pumping gas into a conventional car.

Note default cost per hour Tesla says one could save by not pumping gas into a conventional car.

“When considering the savings from using electricity instead of gasoline, depreciation benefits and other factors,” Tesla says, “the true net out-of-pocket cost to own a mid-range Model S drops to less than $500 per month.”

The way Tesla figures this is a bit abstruse. Tesla actually accounts for a buyer’s time in calculating net-net cost, and estimates, for example, the minutes you saved by not putting gas in your car or by being allowed into an HOV lane.

The default dollar value for “what’s your time worth” according to Tesla’s true cost of ownership calculator is $100 per hour to be potentially saved. So, if you can avoid using gas, and your time is worth $100 per hour – or some other amount – think of all the money you’ll save, or so goes the reasoning.

In short, the cost of the Model S is amortized over the term factoring in gas savings, guaranteed residual value, tax credit(s) and not having to pay for maintenance that one would have to with an internal combustion-powered car.

Regarding its cost estimate calculator online, Tesla says: “We also encourage you to think about Model S ownership in terms of true out of pocket cost. When considering the savings from using electricity instead of gasoline, depreciation benefits, and other factors, buyers will save hundreds of dollars per month compared to owning a gasoline powered car.”

Whether you fully follow Tesla’ s line of reasoning of valuing the opportunity cost of your time – or not – is up to you. Some have. And others have raised their eye brows at assertions made.

Less controversial are the program’s costs. Tesla notes that the 10-percent down payment is “covered or more than covered” by federal and state tax credits ranging from $7,500 to $15,000.

Potential lower-level cost of ownership according to Tesla's calculator.

Potential lower-level cost of ownership according to Tesla’s calculator.

A buyer would have to pay the down payment out-of-pocket as the $7,500 federal tax credit is not a point-of-sale rebate, but the assumption is the buyer could recoup this at tax time. As for state incentives, it all depends on whether a state offers money for EV purchases. Some do, some do not. Buyers in states that do can apply this toward the down payment.

It was also pointed out that New Jersey, Washington state, and Washington, D.C. have no sales tax for electric vehicles and these advantages are not available when leasing.

One main motivation in doing this, said Musk, is he wanted to lower the barrier to entry to make the Model S affordable, and will personally guaranty the customer’s peace of mind.

“I’m essentially making myself fully liable for that,” Musk said and he added that he thinks the program to make the car available to a wider demographic “is the right thing to do.”

Under the program’s terms, after 36 months, the buyer has the right – but not the obligation – to sell back the Model S to Tesla for the same residual value percentage “as the iconic Mercedes S Class.”

Daimler is also a Tesla partner and investor, and Musk emphasized Tesla wants to eliminate any uncertainty among consumers in the prospect of buying a Model S.

The program is limited at this point to U.S. sales and is not to be confused with a lease. It is essentially a financing agreement in which the customer at 36 months can keep on paying for the five-and-a half year term, or not.

If the consumer wants out at 36 months, Musk said the buyer can “put” the car back to Tesla at a guaranteed number, or better.

Another possible "true" cost of ownership scenario according to Tesla.

Another possible “true” cost of ownership scenario according to Tesla.

“We will pay market rate,” Musk said, accounting for his belief that the Model S will be worth more than 43 percent in 36 months.

A buyer also has the right to privately sell or trade the car at any time, and pay off the principle and get out of the deal.

If a buyer wishes to keep the car for the whole term, the buyer need do nothing but keep paying on the car.

Since Tesla is an innovative company with new products pending, and promises more development on its evolving technology, the program is also there as a convenient exit clause to assure buyers they will not be stuck with an undervalued EV.

Musk said he was accounting also for concerns that exist that Tesla Motors could fail, although indicators are not suggesting that this is likely.

He said most opinion makers who have postulated Tesla could go belly up do so not looking at the fundamentals, but base conjecture around facts including that no American automotive start up since Chrysler has survived.

Musk said he thinks Tesla has “a bright future,” and anyone who does due diligence and comes and sees the operation first hand goes away more convinced.

By reducing the financial barrier to entry, and wrapping it with assurances, Musk said Tesla expects a broader customer base to find the Model S affordable. He said he expects “at least half or maybe more” to go for the new program.

The program is not available to current reservation holders, however, and Musk said it is on a “go-forward basis” for new buyers.

The company already “doesn’t have a demand problem,” he said, referring to Tesla’s long waiting list of Model S customers. But he reiterated he wished to open up the potential for more people to get the car than under previous limits of either paying cash or buying with a conventional loan.

As mentioned above, Tesla has a “true cost of cost ownership” calculator on its Web site, and Musk said it should help people figure whether financing the car will work for them. Naturally also, further details are available from Tesla.