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C1 Bank in Tampa will give a Mercedes to customers who buy a $1 million, five-year CD.
May 3
Everyone knows that Wells Fargo (WFC) champions cross-selling, but its backing of an automaker's new, high-profile product has shifted the practice into a higher gear.
Wells has been Tesla Motors' (TSLA) primary commercial banker for the past three years, and it will provide retail financing for customers who want to buy the Silicon Valley company's new Model S electric car.
Wells was the "first financial institution to back financing for the Model S," Tesla said in a press release last month. Because of the car manufacturer's previous relationship with Wells, "it made perfect sense to partner with them on retail financing," Tesla's chief financial officer, Deepak Ahuja, said in an email.
The relationship is not exclusive, and it's unclear how lucrative it will be, but one analyst said the San Francisco bank will build goodwill with a promising customer, score some publicity points and appeal to more affluent consumers.
"When Tesla needs to make a financial decision the hope is that Wells Fargo comes to top of their mind," said Scott Siefers, a managing director in equity research at Sandler O'Neill.
Tesla — whose chief executive and co-founder, Elon Musk, was involved in the creation of PayPal — already has 10,000 reservations worldwide for its Model S with deliveries of the battery-powered sedan beginning this fall.
"Tesla is a unique concept," Siefers said. "It's a brand people know, and it has some cachet. Having Wells Fargo's name tied in is a plus." The deal also gives the bank the opportunity to cross-sell to existing retail customers or to gain a new ones through the offering of an auto loan, Siefers said.
Since the Tesla vehicles are rather pricey - the Model S starts at $49,900 according to Tesla's website — "you are probably getting a well-heeled customer," Siefers added.
