Tesla stock spikes on Musk promises, lease offer
Tesla stock rose in mid-morning trading after the company announced it would offer a new, lower-cost lease plan and its founder, Elon Musk, tweeted that domestic sales of its Model S electric sedan were up 65% in North American and had reached an unspecified “record high” worldwide.
At midday, Tesla stock was trading above $237 a share, up more than $15, or 7% — following a previous-day drop after the Wall Street Journal reported softer than expected domestic vehicle sales — having closed yesterday at $221.67.
The stock has had a roller-coaster season, after a period low of $180 in May, rising and falling on reports that the company would release new models, open a massive “gigafactory” battery facility in Nevada and begin building all-wheel-drive and semi-autonomous vehicles.
Tuesday’s boost began with the company’s statement on its website that it had entered into an agreement with U.S. Bank to offer a new Model S lease at new, lower rates.
Tesla itself has offered Model S sedans, which sell for a base price of $71,000, at between $800 and $1,300 a month, depending on options, following a down payment of about $6,500.
The new U.S. Bank lease could be 25% lower, Tesla said.
Tesla also announced it would offer a three-month “Happiness Guaranteed” program, in which a lease could be canceled if the new driver was not content with his or her Model S.
The company is expected to announce third-quarter earnings figures next week, after the market closes, on Nov. 5.
Analysts have predicted that the company might have difficulty reaching its stated production goals for the year.
Barclays said last week that while it believed Tesla would meet its guidance goal of 7,800 Model S deliveries in the third quarter, it likely would not meet its guidance goal of 13,000 deliveries in the fourth quarter, and thus would fall below its stated goal of 35,000 units delivered for the calendar year 2014.
Barclays added in a subsequent report, though, that the new lease plan could offset what it saw as a plateau in domestic Tesla sales.
A Tesla spokesperson could not be reached for comment.
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