All last week, the automotive and clean tech worlds held their collective breath in anticipation of a mysterious “really exciting” announcement forthcoming from the U.S. electric car start-up Tesla Motors. The Tesla announcement teaser, tweeted by company co-founder and CEO Elon Musk himself, was all the more intriguing because Musk promised to “put my money where my mouth is,” leading some to believe that the announcement had to do with a new financing arrangement for Tesla Model S customers.
Well, they were right. On Tuesday, Tesla Motors released details of a new financing arrangement that could effectively enable car buyers to lease a Tesla Model S for about $500 per month with little or no up-front payment, and with a buy-back guarantee to boot.
The Tesla announcement and “Clean Fleets”
We’ve been following the Obama Administration’s public-private Clean Fleets initiative, and in that context the first thing that comes to mind about the new Tesla announcement is its potential applicability to business vehicles.
When Tesla released details of the new financing arrangement (in partnership with Wells Fargo and US Bank), it also launched an online cost calculator to help potential customers forecast their actual monthly cost of Tesla. Aside from the obvious savings on fuel costs, it includes the value of time, which is a factor of great interest to fleet owners.
The time factor comes up twice in the calculator, applying to the time you save by not having to wait around at gas stations, and the time you save by getting access to rush hour HOV lanes, where available.
The fuel-up time is especially relevant to businesses, given that the number of regions with solid public EV charging networks is growing along with the number of homes and workplaces that have charging stations. In fact, we’ve noted before that charging station availability is on track to far outstrip gas stations in terms of number and convenience.
For business owners, that could mean a significant savings in time, from not having to send vehicles on long detours to fuel up. It could also provide businesses with more flexibility in housing their fleets, without the need for a cumbersome on site gasoline infrastructure.
Keeping up with new EV technology
Another interesting aspect of the new deal is Tesla’s willingness to encourage its customers to lease rather than own outright. That dovetails with a leasing strategy recently undertaken by the largest fleet owner in the world, the U.S. Department of Defense.
Think of leasing in the context of how rapidly EV technology is evolving, and you’ll get the picture. As the military adopts more electric vehicles and other alternative fuel technologies, leasing has emerged as a more attractive option because it enables a more rapid fleet turnover, providing more opportunities to take advantage of new, more efficient and cost-effective technologies as soon as they come on the market.
Another element of EV technology being explored by the military, though not mentioned in Tesla’s announcement, is the potential for making a single EV or an EV fleet pull double duty as a powerful, mobile energy storage device that can be used to power a microgrid at home or at the workplace. For businesses, that means an opportunity to store relatively cheap energy during off-peak hours, then use it during peak hours to avoid higher charges.
Businesses with on site solar or wind power facilities could also squeeze more value out of that investment by storing excess energy in EV batteries.