Tesla Motors revealed its highly anticipated Model 3 electric car yesterday, with one primary goal: to bring the company’s electric vehicle technology to the masses.
It also essentially scored $115 million of interest-free financing.
That’s because each advance order required a $1,000 reservation charge, and within the first 24 hours yesterday, Tesla took in more than $115 million, according to Chief Executive Elon Musk. The reservation charge is refundable.
The five-seater Model 3 — the company’s lowest cost vehicle to date — starts at $35,000. The car will deliver at least 215 miles of range, and the company’s goal is to produce 500,000 vehicles a year, according to Musk.
Tesla also said financing for the Model 3 will be available. Tesla leased 881 cars — worth $85 million in transaction value — in the fourth quarter of 2015, the company said in a letter to shareholders. Lease revenue totaled $41 million in 2015, up from $4.3 million in 2014.
There’s a healthy aftermarket for Tesla cars, which gives the company “some flexibility in terms of our financing partners offering very attractive monthly payments in loan terms,” Jonathan McNeill, Tesla’s president of global sales and service, said during an earnings call previously.
Tesla began offering compelling leasing options through U.S. Bank in October 2014. Lessors were given the option to waive their remaining lease obligation after the first three months, and monthly lease payments were lowered by as much as 25%, the company previously announced.
“We as a company very much admire what they [Tesla] have been able to achieve,” John Hyatt, executive vice president, dealer services at U.S. Bank, said at the AFSA Vehicle Finance Conference yesterday. “There is credit available for anybody who wants to buy a Tesla. I think there are nuances and differences, but I can tell you that they have as much credit available to their buyers or lessors as any other institution.”
Model 3 production is scheduled to begin in late 2017, according to a company press release, and deliveries will begin in North America, starting from the west and moving east, and head overseas once production ramps up.