Tesla alters financing following criticism

Tesla announced new financing terms for the Model S.

(Credit: Josh Miller/CNET)

Last month Tesla said a new financing arrangement would make the Model S cost a mere $ 500 a month. Following critique in the press of Tesla’s creative accounting, CEO Elon Musk announced revisions to the financing plan, now citing a net cost of $ 580 per month.

The two substantive changes to Tesla financing involve a revised resale value guarantee and longer term loans from partners Wells Fargo and US Bank.

With the longer term loans, Tesla says the per month cost of a Model S will be $ 580, taking into account the saving gained by running the car on electricity over an equivalent car running on gasoline. Tesla also says that those purchasing the Model S for a business can run the per month cost down to $ 350.

Previously, Tesla had said it would guarantee the resale value of a Model S as equivalent to that of a Mercedes-Benz S-class. That guarantee was revised in today’s announcement to a value higher than BMW, Audi, Mercedes, Lexus, or Jaguar.

The Tesla Motors site is currently down, but it will host a revised calculator and information on the financing plans,… [Read more]