Summary List Placement
About 10 years ago, I joined a conference call with Elon Musk to talk about a new leasing program for Tesla’s Model S sedan, which was then relatively new to the market. I asked the CEO when he thought the automaker might start its own bank.
He said that Tesla was happy with its established finance partners and wasn’t planning to create the Bank of Elon anytime soon. Which made sense. Tesla was then producing a fraction of the half-million cars it did in 2020. Manufacturing vehicles was far more important than lending people money to buy them.
The practice of serving as your customers’ bank dates back to the establishment of the General Motors Acceptance Corporation (GMAC) in 1919. Back then, GM would loan the funds to buy its cars, while Henry Ford, an opponent of credit, wouldn’t.
GMAC grew to be the crown jewel in the midcentury corporate colossus…