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Tesla alters financing following criticism

After a previous announcement that, through financing and taking resale value and other savings into account, a Model S could be had for $500 a month, Tesla revises its terms and offers a new resale guarantee.

2012 Tesla Model S
Josh Miller/CNET
2012 Tesla Model S
Tesla announced new financing terms for the Model S. 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 U.S. Bank.

With the longer term loans, Tesla says the per-month cost of a Model S will be $580, taking into account the savings 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 being equivalent to that of a Mercedes-Benz S-class. That guarantee was revised in today's announcement to a value matching that of a 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, so individuals can determine their per-month cost of purchasing a Model S.