Elon Musk’s Tesla Motors Inc (NASDAQ:TSLA) announced today a partnership with Wells Fargo & Company (NYSE:WFC) and U.S. Bank that will allow users to finance its Model S Electric cars.

Tesla Motors

According to the company, the financing product from the partnership “combines the surety and comfort of ownership with all the advantages of a traditional lease.” The lease, though not a straight-up lease, can be termed as a hybrid one.

With financing, the “true net out of pocket cost” for the Model S will be less than $500. Using the financing option, consumers will be able to turn the car in for cash or equivalent trade-in within three years.

According to the terms of the partnership, U.S. Bank and Wells Fargo & Company (NYSE:WFC) will provide 10 percent down financing for purchase of a Model S (on approved credit). The 10 percent of the down payment is covered with U.S. Federal and state tax credits ranging from $7,500 to $15,000.

In addition, New Jersey, Washington and D.C. don’t have any sales tax on electric vehicles. However, such benefits are not available when using the leasing option. After factoring for the savings for using electricity instead of gasoline, depreciation benefits and other items, the true net out of pocket cost for a mid-range Model S comes to less than $500 per month, says the company.

Guaranteeing a resale value, the company says that, after three years, a user will have the choice to sell the Model S to Tesla Motors Inc (NASDAQ:TSLA) for the same residual value percentage as the iconic Mercedes S Class.

“This deal makes it affordable to a much broader audience than people currently think,” Musk said during a conference call.

The other objective of the partnership, according to Musk, was also to cast away the doubts about the practicality of electric vehicles and concerns regarding the battery life of the cars. “There is a lot of uncertainty,” Musk said. “We wanted to eliminate that uncertainty.”

The announcement accompanied a video showing Musk providing a personal guarantee on the Tesla Motors Inc (NASDAQ:TSLA) Model S, which he says is “the world’s best car.”

Earlier this week, Musk said that he expects the company to post its first quarterly profit owing to strong sales, excluding cash payments related to non-cash options and warrants. Tesla Motors Inc (NASDAQ:TSLA) told that, for the first quarter, it sold 4,750 Model S cars exceeding its own expectations of 4,500 cars.

Tesla Motors Inc (NASDAQ:TSLA) shares jumped 15 percent on Monday after the news. For 2012, Tesla Motors Inc (NASDAQ:TSLA) reported a loss of $396 million compared to 254 million in 2011.