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Automakers: Electric Vehicle In Mirror May Be Closer Than It Appears

Discussion in 'Electric Vehicles' started by tonybelding, Nov 8, 2007.

  1. tonybelding

    tonybelding Active Member

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    Excellent article from Seeking Alpha. . .

    http://seekingalpha.com/article/53343-automakers-electric-vehicle-in-mirror-may-be-closer-than-it-appears

    I call it excellent because the author reaches many of the same conclusions I have, and therefore has clearly done his homework. :cool:

    I might quibble over his economic comparison of a Zap Xebra versus a Prius, as the Xebra is quite far from what most of us would regard as a real car.

    The point about people keeping their old gas-powered cars around to deal with occasional long trips is one you don't hear made often, though I've tried before to point it out. There are millions and millions of gas cars that aren't going to disappear. If people start switching to electric, the gas car as a "second car" will be around for a long time to come.

    Especially in the context of the Tesla Roadster. . . I think it's hilarious when people write that "nobody will buy it" because they can't drive across the country with it. Like you'd want to drive across the country in a tiny $100,000 sports car anyhow? Get over it! If you want to drive a long trip, have your butler bring your Bentley or your Maserati around from the garage!

    I kid. . . :wink: I don't have a butler, a Bentley or a Maserati. But I do have an old but perfectly serviceable Pontiac Bonneville which I see no reason to get rid of.

    From the article: This leads to an interesting thought: if the big automakers are confronted with EV upstarts cannibalizing their PHEV sales, might they just start selling cars in both PHEV and EV versions, perhaps with the engine and fuel tank of the PHEV replaced by more batteries?

    Chevy Volt EV2 Edition. I'm not kidding, GM. Build it!
     
  2. Kardax

    Kardax Member

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    This guy does know his stuff, but there are two things I have issue with:

    1. Like you, Tony, I think comparing a ZAP Xebra to a Prius is not really appropriate.
    2. He thinks battery leasing is a good thing. Leasing is never a way to save money. I have no clue why so many people think this is the answer. Unlike, say, a car that still has a lot of value at the end of a lease, an EV battery is presumed to be worn out by then... you think the EV maker is just going to eat that cost? Not a chance; they'll pass it on to the consumer somehow.

    -Ryan
     
  3. tonybelding

    tonybelding Active Member

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    I'm not a big fan of leasing either.

    I think leasing is based on the mentality of debt, of deferring payment as much as possible, even if it means you pay more.

    Everybody who leases a battery will end up paying more than they would if they owned their battery. The theory is that they'll be willing to pay more -- maybe a lot more -- as long as they don't have to pay up front.

    And that's the way much of the world works these days. I don't buy into it myself. I've never gone into debt, never owed anybody. I've never had a credit card. I don't like to pay interest, I like for other people to pay me interest.

    Funny story. . . All the time when I was in college, companies showered me with credit card offers. I resisted for a long time, several years. Finally I decided to get a credit card so I could mail-order stuff more easily (this was before debit cards caught on), and I applied for one. I was rejected. They wouldn't give me a credit card because I had "no credit history".
     
  4. TEG

    TEG TMC Moderator

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    You are lucky if you have never had any debt. If I didn't have a credit rating, I would not have been able to buy a house and enjoy that freedom and chances for property value appreciation. (That was leveraged money well borrowed).

    I enjoy the convenience of credit cards. Shopping online, not having to carry change around and all that. And once and a while a big expense hits and the ability to carry some debt for a few months can be helpful.

    I have never bought a car on credit (not much appreciation opportunity there), and in fact I only carry minimum liability coverage insurance on my vehicles which some people think is crazy on an expensive new vehicle. So far this strategy has paid off as my wife and I have never been in any kind of major accident in our cars.

    I have never leased a vehicle, and generally don't like the concept, but I was just recently thinking how nice it would be to have a chance to get a Roadster for a year even if I couldn't afford to own one long term.

    Yes, leasing costs you more in the long run if that is all you ever do, but if you want a chance to live beyond your means for a short period it could be an option.

    I wonder if any Tesla Roadster customers are businesses who plan to lease out the vehicle(s) they buy?
     
  5. Kardax

    Kardax Member

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    Mainstream consumers who buy any car, including an electric one, are going to need a financing plan to pay for it. So they're going to be deferring payment anyway. Now, if you look at a 5 year payment plan for the whole car including the battery, you get one price... but if you finance the car and lease the battery, your loan will be smaller but your monthly payments will be higher! Nobody is going to go for that.

    Now my debt story:
    I come from a poor family, divorced mother, etc etc... we survived on food stamps in the early '90s. I wasn't a great student in high school, so I needed loans to go to college. Also needed a loan for my first car. I did well in college, got a good job, paid off the car and student loans. My mom was also able to make a life for herself and, with debt help, got a house and an Audi Quattro TT convertible :)

    Today, my only debt is my mortgage. I can afford a bigger house, but I'm very single so I didn't see a need. I also have a credit card, but I pay it off every month... and I get 1% back on all purchases. The bank has lost hundreds of dollars on me :)

    I guess my point is that, when used properly, debt can be a tool to enable you to live a life you might not otherwise be able to have.

    All that said, I'm not buying a Tesla Roadster until I can afford to pay cash up front. Spending that much money on a car is a totally stupid thing to do so I want to be in a position where I have more dollars than sense before I splurge :)

    -Ryan
     
  6. vfx

    vfx Well-Known Member

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    #6 vfx, Nov 8, 2007
    Last edited: Nov 8, 2007
    Nicely written and I think the title is clever too.


    Always buy cars with cash -OK, I actually get a loan to buy my cars with no prepayment penalties and pay them off in 3 months. Looks good on paper when I go for home loans.
     
  7. tonybelding

    tonybelding Active Member

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    That was my strategy too. Then I spun my Esprit off the road and through a fence. . . It was a relatively minor accident: no injury, no mechanical or structural damage. It took about $5,000 for parts and another $5,000 for labor (and five months in the body shop) to put the car back the way it was before.

    It wouldn't have mattered if I'd done the same in my old Bonneville, which isn't worth anywhere near $10,000 to begin with. I'd just shrug, scrap it, and get another car.

    So. . . Lesson learned. The Roadster will most definitely be insured for accident damage.
     
  8. VolkerP

    VolkerP EU Model S P-37

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    Adding to this thread since I hit "Bentley" here searching TMC -
    Bentley Will Use V-8, W-12 Engines In Plug-In Hybrid
    That's quite funny. Bentley customers can't afford $40k in batteries? But V8/W12 engines are OK? I never considered a Bentley for economic reasons.
     

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