Updated from 1:54 p.m. ET to provide executive comments from conference call in the second paragraph.NEW YORK ( TheStreet) -- Tesla Motors ( TSLA) is fixing some mistakes, according to CEO Elon Musk, and is changing the way financing for the Model S works. On a blog post and conference call, the Palo Alto, Calif.-based Tesla said it was raising the Model S resale guarantee to be the highest of any premium sedan brand made in volume, higher than BMW, Audi, Mercedes, Lexus or Jaguar. "When we did our first financing announcement about a month ago, we didn't get it quite right," Musk said on the call. "We received a lot of valid criticism, and we've tried to make it a lot better." Tesla first announced the financing program in early April, which made the car "more affordable" to consumers. The company noted that when considering savings from electricity, depreciation and other factors, the cost of owning a mid-range Model S is less than $500 per month. After 36 months, owners have the option to sell the Model S back to Tesla, or keep it. Musk is personally guaranteeing the resale price of the new leasing initiative, as he did with the initial announcement. "We appreciate the feedback from a number of journalists and customers that the first version of our financing product wasn't quite right," Musk said in the press release. "They were right, so we are fixing it and, moreover, upping the ante by providing the best resale value guarantee in the automotive industry."
In addition to upping the resale price, Tesla's partners, which include US Bank ( USB) and Wells Fargo ( WFC), will extend the lease terms to 72 months from 63 months, to lower the cost of the monthly payment. The company noted it will cost $580 per month for a personal consumer to own the car, taking into account only gasoline savings. If a business owner purchases the car, the cost will effectively be $315 per month, assuming 70% of the miles are for business use. The effective cost of the lease is $800 per month, versus $1,100 per month when the financing plan was initially announced. Elon Musk tweeted Thursday that the company had a huge announcement to make, which was about righting some previous wrongs.
Time to up the ante (and fix some mistakes). Tesla announcement tomorrow.— Elon Musk (@elonmusk) May 2, 2013Last month, Tesla announced a new service program, building out a fleet of 100 Model S loaner cars, among other amenities for owners. Shares of Tesla were higher in Friday trading, up 0.76% at 54.52. -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia