Tesla Readying to Lease Model 3s to Employees

EV Maker's general counsel departs.

by on Feb.20, 2019

Tesla is readying to offer leases on its new Model 3 to employees to help boost demand for the sedan.

Tesla Inc. is readying for the next step in the evolution of its Model 3: leasing.

According to Electrek, the Palo Alto, California-based EV maker is looking to boost demand for the new mainstream sedan by offering employees a leasing program for the vehicle. Initial reports suggested the program would be in place in as little as two weeks.

Electrifying News!

The leasing availability was outlined in an email to employees. However, the company denied it will be ready that quickly, although did confirm it was coming.

“This is simply an internal document to ensure teams are prepared for when we eventually introduce a leasing option to customers,” Tesla told Electrek in a statement. “No decision has been made about when Model 3 leasing will be available, but it will definitely be after the dates outlined in this document.”

(Tesla misses Q4 earnings, raising new concerns. Click Here for the story.)

CEO Elon Musk sees another top executive leave the company as General Counsel Dane Butswinkas resigns after two months.

The company was quick to point out that the lease program will only be offered to employees in the near term. Tesla officials have discussed using leasing to boost demand for the Model 3, but the automaker is reticent to do it because of the negative effect on GAAP financials.

“Well, we’ve been reluctant to introduce the leasing on Model 3 because of how its effect our GAAP financials,” CEO Elon Musk noted during the last earnings call, according to Electrek. “So it is worth noting that demand to date is with zero leasing. So obviously, leasing is a way to improve [Model 3] demand but it makes our financials look worse.”

(Click Here for more about Tesla’s $218M purchase of Maxwell Tech.)

Leasing isn’t new ground for Tesla as it offers leases on its Model S and Model X vehicles. Departing CFO Deepak Ahuja said that leasing represents only about 20% of Model S and Model X sales.

Ahuja’s recent decision to retire raised plenty of eyebrows recently, as the company has suffered through a string of high-level executives leaving the company. Well, the trend continued today after the company’s top lawyer, Dane Butswinkas, announced it was leaving after being with the automaker for just a couple of months.

(To see more about Tesla’s new Gigafactory in Shanghai, Click Here.)

Butswinkas joined Tesla in December and now returns to his previous role as the company’s outside counsel at law firm Williams & Connolly.Jonathan Chang, Tesla’s vice president of legal department, will replace Butswinkas effective immediately, the company said in an email statement to Reuters.

Tags: , , , , , , , , ,

2 Responses to “Tesla Readying to Lease Model 3s to Employees”

  1. kent beuchert says:

    As much trouble as Tesla has in providing repairs and maintenance, leasing cars makes zero sense.
    So where is all of that “insanely strong demand for the Model 3″??

  2. John says:

    I can only assume that the long list of people who made deposits on the Model 3 disappeared.

    Is it time to find Lee Iaccoca to pitch Teslas, “Buy a car, get a check.”