Guaranteeing the residual value of a Mercedes S Class seems like a huge, huge gamble to me. Given the relative technological rate of change for electric cars vs internal combustion engines, doesn't this have the potential to be a huge financial hit for Tesla?
This is the most salient point here. It seems like a ballsy move but is in fact much less so given you're benchmarked to a car with what is probably bottom-10% residual.
Well look at it this way. If they can't ramp up adoption they're done sooner than later anyway. If they're selling a lot more cars in the future, they can eat a significant loss on today's numbers.
As someone pointed out up thread, they aren't guaranteeing the value - they're guaranteeing the % of value / original sales price, which is unlikely to suffer. In other words, if there are huge technology improvements in the S Class, you'd pay for it up front AND in the used car price (sure, the curve might be slightly different, but if anything, may be steeper).
