Video: Elon Musk Discusses Tesla Model S “Lease” Deal and 40-kWh “Hobbled Horse” Cancellation


Tesla Motors CEO Elon Musk is never short on words and with the recently announced Model S “lease” offer, which remains rather controversial, Musk turned to Bloomberg West to “clarify” the situation.

Tesla Introduces New Leasing Program...But Cancels 40-kWh Model S

Tesla Introduces New Leasing Program…But Cancels 40-kWh Model S

There’s discussion on Musk’s buyback guarantee, some back and forth on the actual monthly “lease” rates for the Model S and then the interview turns to the cancellation of the 40-kWh version of the Model S.

There’s obvious skepticism voiced by interviewer Betty Liu in regards to Model S lease rates, but Musk counters with some valid explanations that sort of make sense of Tesla’s confusing “lease” rate calculator.

But it’s Musk talking of the cancellation of the 40-kWh version of the Model S that most intrigued us.  As Musk claims, the range of the 40-kWh Model S is too limited to ever be one’s only vehicle.  Musk says the 40-kWh version would only ever be a second vehicle for consumers and that’s not Tesla Motors way.  All Tesla offerings will have sufficient range so as to eliminate the need for Tesla drivers to own a “back-up” vehicle.

Choice Musk quotes: The 40-kWh Model S “Felt like a hobbled horse” and it “Wasn’t a good product.

Check out the video interview for more on the Tesla story.

via Bloomberg TV

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14 Comments on "Video: Elon Musk Discusses Tesla Model S “Lease” Deal and 40-kWh “Hobbled Horse” Cancellation"

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“All Tesla offerings will have sufficient range so as to eliminate the need for Tesla drivers to own a “back-up” vehicle.”

The irony is that 95+% of Tesla’s customers are wealthy enough that they *will* have other cars in their collection.

Yeah, I chuckled at that too. Sorry, but if you are already a 2-car household, a Leaf is a much cheaper option than a Model S.

We have two EVs, a Tesla Model S and a Leaf powered by our 6.88KW solar array. We don’t own any other vehicles.

In that very limited way – I want to be you! 🙂

Truly, that is my goal. Or maybe more like a 2nd gen Volt with
50 mile AER/ 50 mpg capability + a Model S in our garage. Put
the pickup truck out back until I can get a VIATRUX! Or…..maybe
I should buy those Powerball tickets…

I saw my first Model S in the wild yesterday – the
owner pulled up to me and had a nice chat. She is thrilled with her
60kwh model. She said they were expecting the car sometime in July,
but Tesla suprised them with a February delivery! Good for you – good for
them – It was black with black leather and an absolutely stunning looking

This information truly supports the claim that they are building S’s at the
500/week rate.

Interviewer Betty Liu is a total babe. Just thought I’d throw that out there.

OK. He has said that the BMW Series 3 rival will be postponed, and now it appears he is saying no Tesla will have less than 200 miles range. Sounds like he is hoping/waiting for a battery breakthrough.

If that’s Elon/Tesla new plan, I can’t wait for the announcement of the Tesla $30k 200 mile car in 2017!!!!!

Wahoo, go Tesla!!!

American made and American powered…. hard to believe people are still against that…


I see the dropping of the 40kwh model as a bit short-sighted. I believe the demand is low now – today, because S Model takers are more affluent and the pent-up demand will be filled pretty much by the end of this year. This also indicates some limitations of Tesla’s marketing approach of only taking preorders, as many 40kwh cars could be sold with the conventional test drive-comparison shoppers. Tesla could be shooting themselves in the foot with the lack of the entry-level car. One hitch to me was that the different levels of cars all look the same. A buyer of the Performance 85kwh, does not want his neighbor who got a 40kwh for $59,000 to be stylin’ the same ( in appearance ) as he. 40kwh should be destinguishable from a distance – because buyers of cars at $100,000+ want to be recognized ( ego ) as successful and yes, superior – let’s face it. OK, perhaps not you – oh humble 85kwh owner – but many folks do make buying decisions based on these criteria ( image ) such as your typical 7 series BMW, or S-Class Merc driver. On the upside – Tesla can pop the… Read more »

“Musk says the 40-kWh version would only ever be a second vehicle for consumers and that’s not Tesla Motors way.”

So it is not “we don’t have enough orders” like stated before? I guess, even that last statement is not the hole truth.
The real reason is: just 40kwh of 18650ers don’t give you that much power for a heavy car (=slower) and they didn’t last very long because of reduced range = more cycles and more stress per cell while accelerating – what would the guaranty on this pack have bin? 60,000 miles? This would have led to a lot of bad press in two to three years (like: where is my range gone Mr. Musk?).

So far not a bad decision, even if not honestly communicated. But to delay that blue star to 2016/17 is imo. Like I said before – premium is a good starter, but it won’t change the world.

Ok, Elon said the 40kwh Model S wouldn’t have bin a good product, which kinda sums it up. I have to grant him that.

+1 Just want to second that. The real reason is battery warranty issues.

The 40-kWh Model S doesn’t have to be a “Hobbled Horse” if they just accept to add the option of a micro generator on it. A micro Wankel for instance in a Flex-Fuel configuration. OK it is minor concession to the all electric mantra but it does allow a Model S 40 KWh to be the only family car and thus make it more affordable to a broader public at a lower cost.
By the way the range extender option on an 85 KWh version would also make sense just to secure the drivers for the case of a blackout or another emergency situation. Putting all the eggs in one basket is never a good thing. With a micro generator a blackout would just be noticed to the drivers as the one big exceptional fuel use, nothing more and certainly not as a stranded car nightmare. On a financial point of view also it does make sense to safeguard a 100000 $ car with a 3000 $ device, that is only 3% of the value.

In view of cold weather problems, those would no doubt be exacerbated by smaller batteries. The Model S is a work in progress, and it will improve in time.

It is very odd sounding saying 40 kwh is a poor product, when it is 50% larger than a Leaf, Ford Focus EV, Fiat 500 E, and Spark EV. I’m rather surprised at Mr. Musk’s choice of words, however I understand why he said it.

Who will be the first automaker to make a reliable 90 or 100 kwh battery package?