Tesla Might Open Up Its Own Bank, As Model 3 Pre-Orders Rank Record Numbers

Tesla is starting its engines for an Oct. 17 reveal, and speculations roam free as to what the upcoming mysterious product from the company might be.

With the shroud of mystery so thick, anything could be in store, from the model Y prototype to a hefty Autopilot update, some new piece of tech or radically revamped battery packs, or even a bank.

You read that right.

Tesla does things a bit differently than other car sellers, as the company currently avoids "captive lending," a practice that is rather common in the auto market.

What this implies is that car buyers who get their vehicles from dealerships rely on the dealer to arrange their financing. This means that dealers often don't just sell cars — they sell car loans, as well. To summarize, a captive-finance arm of an automaker can borrow funds at low rates and then write loans at a higher rate, making a good profit from the difference.

At the time of the writing, Tesla has inked partnerships with two banks that set up loans for its not universally affordable (yet) vehicles.

However, the car company's manufacturing numbers are surging to about 500,000 per year, a big increase from the former 90,000 per annum. It makes more sense that the enterprise is looking into grabbing the potential loan profits, given the sizable increase in production.

The Model 3, for instance, already scored about 375,000 advance orders.

The car is supposed to be Tesla's most affordable variant to date, asking for $35,000 before tax credits. This implies that most buyers will resort to classic financing solutions, as few people have that sum at their disposal.

An additional reason for Tesla to have its own financing arm is that, earlier this year, the company hit a funding limit with one of its partners. It is self-explanatory that Tesla's best interest is to be autonomous in respect to its financing.

In a classic dealership standard, buyers can negotiate an external financing option and come with it to the dealer. Tesla's best interest is to control the process from end-to-end, which would make "Tesla Financial" a great option for a seamless process. As a reminder, Elon Musk, Tesla's CEO already has experience in the financial world, as he is one of PayPal's co-founders.

In Musk's tweet, he announces an upcoming "product" for Oct. 17, which could mean that a financial service from Tesla is in tow.

Stay tuned and we will make sure you're the first to know.