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Tesla refuses to discount Model S

Date: 15 August 2014   |   Author:

Tesla will not be offering discounts or bulk deals to fleets or leasing companies on its Model S.

The stance from the electric vehicle manufacturer echoes budget brand Dacia's approach at the other end of the scale. Tesla is looking to attract SME business, as well as one-off purchases the likes of architects and dentists.

The Model S is eligible for 0% benefit-in-kind for a company purchase until April 2015, 100% first-year write-down allowance, as well as being road tax and congestion charge exempt.

The electric vehicle manufacturer did say it is currently in talks with all the major leasing companies to work out how customers will be able to lease a Model S.

Georg Ell, Tesla Motors UK and Ireland country director, told BusinessCar it is also working with residual value experts Glass's and Cap to help set an RV for the car.

He said: "[The RV setters] are confused by some of the economics of the Model S and we're working with educating them.

"The Model S can receive free software updates to improve the car over its lifespan, and the only regular servicing costs are diagnostics checks, tyres and window wipers, so setting a residual is a bit different with us."

Ell gave an example of Tesla pushing a wireless update to all Model S owners to add a creep functionality to the car when driving in slow moving traffic.

Customers of the Model S buy the car and the battery together, and the standard 60kWh car comes with a five-year warranty on the car and eight-year/125,000-mile warranty on the battery. The Model S 85kWh and P85kWh both come with a five-year warranty on the car and eight-year/unlimited mileage warranty on the battery.

Cap and Glass's have historically found it more challenging to set residual values for electric vehicles, with doubts about the used demand and technology being primary concerns.

Tesla is guaranteeing US Model S customers 50% of the value of the vehicle after three years. It is also allowing US customers who have bought on finance to sell their Model S back to Tesla with the value equal to 50% of the original base purchase price of the 60kWh Model S plus 43% of the original purchase price for all of the options. Ell said the team has not decided if it will follow suit in the UK.