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The Wall Street Journal
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Image Credits: Tesla Motors (Top: Model S, Bottom: Model X)
October 28, 2014
Article Quotes:
With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.
Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank’s lower cost of capital for the lease-rate cut. He also unveiled a “happiness guarantee,” promising to take back cars within the first 90 days of ownership “if you don’t like your car for any reason.” The return policy doesn’t allow a buyer to swap for another vehicle.
The incentives are unusual for Palo Alto, Calif.-based Tesla, which sells the Model S for between $71,000 and well over $100,000. Monthly leases currently run between $777 and $1,271, and leases represent a substantial share of Tesla sales.
The auto maker has long had a waiting list in the U.S. for its only car, which is currently back-ordered in its home market until December, according to a company sales representative. Tesla, however, is facing declining sales in the U.S., according to WardsAuto.com, an industry publication that tracks auto company data.
Through September, Tesla sold 10,335 Model S sedans in its home market, down 26% compared with the same period in 2013. The U.S. decline has come even as the company’s U.S. production increased 10% during the same period, according to WardsAuto.
Tesla doesn’t disclose sales volumes by region, but has said it expects half of its sales to be outside the U.S. by the end of 2014. With a goal of selling 35,000 cars this year, Tesla would have to sell about 17,500 models in the U.S. At its current sales pace, the auto maker will miss that target by a wide margin—and will have to double its sales pace to hit its goal.
“There still is extremely high demand for the car,” a Tesla spokeswoman said, declining to confirm WardsAuto’s data. The auto maker has said it needed to divert some production from its Fremont, Calif., factory to Asia as it ramped up sales in China in April.
Haig Stoddard, a WardsAuto analyst, said Tesla’s U.S. struggles suggest more than a need to divert production to international markets. “I would attribute the sales decline to the Model S being a niche product that has probably temporarily satiated demand, somewhat exacerbated by falling gas prices,” he said.
Tesla shares fell $13.57, or nearly 6%, to $221.67 in 4 p.m. New York trading on Monday. The selloff also followed disclosures last week by Daimler AG and Toyota Motor Corp. confirming the two had sold shares they held in Tesla.
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Elon Musk has responded to the WSJ article:
Tesla yesterday announced it was offering better pricing on leasing, thanks to an arrangement between the company and US Bank. The company made clear that the bank — being in the financial services business — has a “lower cost of capital” and therefore lease payments would be lowered by up to 25%. But in the land of the Wall Street Journal, no good news goes unpunished. It reported that Tesla “looks to lift sagging U.S. sales through new incentives.” Tesla CEO Elon Musk had this to say in response:
@WSJ re Tesla sales is incorrect. September was a record high WW and up 65% year-over-year in North America.
— Elon Musk (@elonmusk) October 28, 2014
Image Credits: Tesla Motors (Top: Model S, Bottom: Model X)
October 28, 2014
Article Quotes:
With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.
Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank’s lower cost of capital for the lease-rate cut. He also unveiled a “happiness guarantee,” promising to take back cars within the first 90 days of ownership “if you don’t like your car for any reason.” The return policy doesn’t allow a buyer to swap for another vehicle.
The incentives are unusual for Palo Alto, Calif.-based Tesla, which sells the Model S for between $71,000 and well over $100,000. Monthly leases currently run between $777 and $1,271, and leases represent a substantial share of Tesla sales.
The auto maker has long had a waiting list in the U.S. for its only car, which is currently back-ordered in its home market until December, according to a company sales representative. Tesla, however, is facing declining sales in the U.S., according to WardsAuto.com, an industry publication that tracks auto company data.
Through September, Tesla sold 10,335 Model S sedans in its home market, down 26% compared with the same period in 2013. The U.S. decline has come even as the company’s U.S. production increased 10% during the same period, according to WardsAuto.
Tesla doesn’t disclose sales volumes by region, but has said it expects half of its sales to be outside the U.S. by the end of 2014. With a goal of selling 35,000 cars this year, Tesla would have to sell about 17,500 models in the U.S. At its current sales pace, the auto maker will miss that target by a wide margin—and will have to double its sales pace to hit its goal.
“There still is extremely high demand for the car,” a Tesla spokeswoman said, declining to confirm WardsAuto’s data. The auto maker has said it needed to divert some production from its Fremont, Calif., factory to Asia as it ramped up sales in China in April.
Haig Stoddard, a WardsAuto analyst, said Tesla’s U.S. struggles suggest more than a need to divert production to international markets. “I would attribute the sales decline to the Model S being a niche product that has probably temporarily satiated demand, somewhat exacerbated by falling gas prices,” he said.
Tesla shares fell $13.57, or nearly 6%, to $221.67 in 4 p.m. New York trading on Monday. The selloff also followed disclosures last week by Daimler AG and Toyota Motor Corp. confirming the two had sold shares they held in Tesla.
============================================
Elon Musk has responded to the WSJ article:
Tesla yesterday announced it was offering better pricing on leasing, thanks to an arrangement between the company and US Bank. The company made clear that the bank — being in the financial services business — has a “lower cost of capital” and therefore lease payments would be lowered by up to 25%. But in the land of the Wall Street Journal, no good news goes unpunished. It reported that Tesla “looks to lift sagging U.S. sales through new incentives.” Tesla CEO Elon Musk had this to say in response:
@WSJ re Tesla sales is incorrect. September was a record high WW and up 65% year-over-year in North America.
— Elon Musk (@elonmusk) October 28, 2014
