Tesla stock rises on Musk comments
Tesla Motors CEO Elon Musk said the electric vehicle automaker’s sales remain strong despite gas prices hitting a four-year-record low. He disputed suggestions that a new leasing program will result in lower revenue.
Early Tuesday, Musk disputed a story in the Wall Street Journal.
“Article in @WSJ re Tesla sales is incorrect. September was a record high ... and up 65 percent year-over-year in North America,” Musk wrote in a Twitter post. “Also, lease price improvement is due to US Bank deal. It is *not* a discount. Revenue to Tesla is unchanged.”
Shares of the Palo Alto, California, automaker closed up 9.5 percent Tuesday, or $21.10, to $242.77 on Musk’s comments.
Barclays auto analyst Brian Johnson said Musk’s tweet “implies deliveries of about 3,274 units in September, which we estimate would put third-quarter North American deliveries at about 4,900 units vs. our estimate of about 3,700 units. While the September result was well ahead of our estimate, it is worth pointing out that the beat was likely a function of catch-up post factory downtime in July,” Johnson wrote. “Moreover, North America deliveries YTD are still down about 17 percent as Tesla likely hasn’t have the same Model S order book this year as it did last year when it was still working through initial demand for the vehicle.”
Tesla plans to start selling an SUV called the Model X next year.
In a blog post on Saturday, Musk disclosed a deal for leasing with US Bank, “which has a much lower cost of capital than us, is now offering very compelling leasing for Tesla buyers in the United States. This will lower monthly lease payments by as much as 25 percent on a new Model S.”
Tesla also announced a new offer — attempted by automakers in prior years but often abandoned — to allow new buyers to return their vehicles: “Leasing now also comes with the Tesla happiness guarantee. 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,” Musk said. “As always, leasing a car with Tesla involves no signatures or paperwork, unless required by your state DMV. You just read the super simple terms and conditions on the center screen, tap once and it is done.”
Tesla also says buyers can buy a car online.
Last week, Gov. Rick Snyder signed legislation banning automakers from selling vehicles directly to customers in Michigan — a move pushed by Michigan auto dealers to block Tesla from selling cars.
The new law closes a loophole that Tesla has used in other states to maintain company-owned retail stores, bypassing the dealership route. Snyder said the bill, approved overwhelmingly by both houses, “clarifies and strengthens” an existing law that prohibits direct sales of new cars in this state.