The electric carmaker is offering financing plans through U.S. Bancorp and Wells Fargo.
Tesla Motors Inc. stock dropped more than 7 percent Wednesday after it announced a plan late Tuesday to broaden sales of its electric cars by financing consumer purchases through U.S. Bancorp and Wells Fargo.
Under the financial arrangement announced by Palo Alto, Calif.-based Tesla, the two banks would provide consumers with loans to buy Tesla’s $69,900 Model S electric car at a 2.95 percent interest rate for more than 60 months if they put down 10 percent of the purchase price.
But, in an unusual wrinkle, the banks would also allow the 10 percent down payment for the car to be made from federal and state tax credits that encourage consumers to purchase electric cars. The tax credits could range from $7,000 to $15,000, depending on the state where the consumer lives.
U.S. Bancorp, based in Minneapolis, said it was offering to lend 90 percent of a Tesla car’s purchase price for a repayment period of up to 63 months, and to lend 85 percent for up to 66 months. In either case, a 10 percent down payment would be required; consumers who wish to use the tax credits for the down payment must obtain the credits on their own.
“We are not involved with the tax credit. Customers should see their tax adviser for details on what’s available to them,’’ said a U.S. Bancorp spokeswoman in Minneapolis. “We require a 10 percent down payment.’’
Wells Fargo officials in Minneapolis declined to comment on their role in financing Tesla car purchasers.
Wall Street wasn’t convinced the financing plan would provide much of a boost to Tesla’s electric car sales, and Tesla stock fell $3.24, or 7.3 percent, to close at $41.10 Wednesday.
“Our early analysis suggests that while the program is likely incrementally positive, it may perhaps not prove a game-changer in terms of demand,’’ wrote Ryan Brinkman, a New York-based analyst for JPMorgan, in a note to investors Wednesday.
The Minnesota Automobile Dealers Association in St. Paul, which has opposed Tesla’s plans to open company stores in Minnesota rather than conventional dealerships, said it had no quarrel with Tesla’s unusual financing plan.
Scott Lambert, executive vice president of the dealers association, said Tesla’s financing plan using government tax credits was not unprecedented. Conventional auto dealers provided a similar arrangement for consumers in 2009 during the federal government’s “Cash for Clunkers” rebate program.
“It’s probably a sound business practice, but it’s not revolutionary,” Lambert said. “I don’t think it helps Tesla much, because if someone is in the market for an electric car I don’t think coming up with cash is a problem.”
Tesla also said in its announcement that the $1,051 monthly payment for a Model S under one of the loans it described Wednesday was closer to $500 a month if consumers included their savings from not buying gas for the car.
Steve Alexander • 612-673-4553