Canceling my reservation

[Reciprocity]

I looked at the Gene Munster analysis: Model 3 Could Change The World: A Cost Of Ownership Study | Loup Ventures, and I find it problematic, for the following reasons:

(1) The maintenance costs in the Toyota Camry are listed as $495 in the first year, $443 in the second year, and $443 in the third year, for a person driving 13,476 miles/year. This seems excessive to me. 13.5k miles/year would typically require 2 oil changes for the 0w-20 semi-synthetic oils used today. This is about $30/change. Brake pads on a Camry won't be worn out after 40k miles, unless the driver is really abusing them. Munster's analysis seems to account for a tire change in Year 4 maintenance, which seems reasonable to me. Just from life experience and many years driving Japanese brand sedans, I cannot recall ever spending anything close to $1300 on maintenance items in the first 3 years of ownership.

We also don't have enough data on tire wear in the Model 3, but I am fairly sure that a RWD sport sedan with a very torquey electric motor will consume tires at a greater rate than a FWD Camry.


(2) Repairs. Munster allocates $99 in repairs for the Camry in Year 3, $238 in Year 4, and $346 in Year 5. He allocates nothing for the Model 3. Given the high maintenance cost of Model S, I am skeptical that Model 3s, especially early production units, will be as repair free as he expects, especially after the 4-year bumper-to-bumper warranty runs out.

(3) Insurance. Camry and Model 3 are estimated to have similar insurance rates. I am skeptical of this. I believe that Model 3 is likely to be a safer car than the Camry (no engine block, lower chance of rollover due to battery, better sensor suite for collision mitigation), but the extent to which this is offset by high repair costs and driver demographics is unknown. Model S has proven to be expensive to repair. Model 3 components, at least initially, will be hard to come by and probably expensive. If the population of Model 3 drivers proves to be more aggressive and accident prone than the Camry driver population, insurance rates will rise accordingly.

Finally, one should consider that initial cash outlay is an issue. Even if we assume that Model 3 is less expensive over a total ownership period, many people cannot afford a big upfront cost. I expect Model 3 to win some sales from Camry/Accord buyers who are willing to stretch and like new technology, but my expectation is also that the bulk of Model 3 sales will be conversions from BMW 3, Audi A4, and MB C-Class, and equivalent customers.




I have a much dimmer view of what will happen. People won't get good at math. They will simply take on more debt. Many of my friends and colleagues are highly educated people who are really terrible at managing money, but this is not Tesla's fault. Tesla, rather than Audi or BMW, will simply be the beneficiary.

1,2) My leases require maintence to be done. When we leased our mini van for 3 years it was discounted if we bought the required maintenance package up front, it was almost $800 for 3 years so I do not see an issue with Genes TCO there. Tires are a wash, maybe a bit more for model 3 due to weight.

Gene leaves off Residual value. I just want everyone to open their mind on this issue. This car is unique in that the base model could be worth (not so much in dollars but demand) a significantly more by adding FSD when its available. Some fleet type operators might even be scrounging them up from people on the used market to add FSD and turn them into taxis. Much of the residual value is based on the fact that an older car will require a lot more maintenance. This is not true for the model 3. No timing belt, no 100,000 mile tune up, no catalytic converters. I could go off for hours but I think you get the point, but the maintenance costs of a car are almost as much as a payment once they are 8+ years old. I believe the residual value of the model 3 will be MUCH MUCH higher then any car in its segement and by default a Model 3 has a higher starting price. But even if you have the Camry and Model 3 depreciate at the same rate, the model 3 is still worth much more even without all of the above mentioned. A quick math example, and I know this isnt tough math because I can do it:

Base Camry: 23000 -> Year 5 -> $11500
Base Model 3: 35000 -> Year 5-> $17500

The difference is $6000 to save over 5 years or $1200/y on average, or $100/mo. If you drive a lot, there might be enough savings in just fuel and maintenance from the normal driving. Not including things like brakes and all the parts that wear out on a schedule like timing belts. What does driving a lot mean. If you spend $200 a month in Gas today, then bingo. In most cases you can save your $100 right there.

What do you want to bet that the Model 3 will have a higher residual value then your average camry. If you say the Model 3 is worth 60% instead of half, the math is even easier. $14,000 vs $11,500 or only $3500 over 5 years. That is just $700 per year or less than $60 a month. Now if you spend $120 a month on Gas, then the Model 3 is about the same cost as a base Camry. Some people drive their Camrys to Starbucks every day before work and spend $80 a month. Do some fresh drip at home for $20/mo and you are there. I am not trying to be sarcastic or a jerk, but when people see the model 3 next a base Camry and then drive both. They will find that they are very good a math, just like me.

If you could do a 10 year lease and bought solar to go with your base model 3, it would be on par with a base Carrola to own over that same time period. Heck it night even be cheaper depending on how lucky you are with the Toyota as it gets older.

The 10 year lease would take into account the residual value, so you would not be on the hook for that. The problem is that there is not a 10 year lease. But I can dream. Tesla couldnt build enough of them for the demand anyway. They cant build enough for the demand for a Camry competitor and wont for a few years.

Again, I want to stress that it does not matter how accurate the above simple analysis is. It can have 0 basis in reality and still be a very compelling argument for someone who wants it bad enough. This is why Tesla is genius. While everyone was making crappy, ugly EVs, Tesla decided that they only way this would work is if the EVs where lust worthy and forced people to do math. This must have been planned from day one because it does not work that great without driving demand that wouldnt normally buy the cars. Model S has proven this to be fact btw. People find ways to afford a model S and people will find ways to afford the model 3, only it will be easier.

Edit: BTW, my model x has 30,000 miles and 0 maintenance cost with the exception of one tire rotation and new tires just last week. Pro tip. Dont take your car to tesla to rotate your tires.. they charge to much. Most tire places will do it for free.

 

[anticitizen13.7]

1,2) My leases require maintence to be done. When we leased our mini van for 3 years it was discounted if we bought the required maintenance package up front, it was almost $800 for 3 years so I do not see an issue with Genes TCO there. Tires are a wash, maybe a bit more for model 3 due to weight.

Your lease for a minivan is not a lease for a Toyota Camry. Toyota Deals | New Toyota Incentives & Special Offers Toyota leases cover normal factory maintenance for the first 2 years. There is no "required maintenance package" for this car. $1300 for regular maintenance on a car of this type is absurd.

I have driven Civics and Accords for the past 25 years, and have followed the maintenance schedules precisely. I have never, ever, spent $1300 in the first 3 years for maintenance.

Gene leaves off Residual value. I just want everyone to open their mind on this issue. This car is unique in that the base model could be worth (not so much in dollars but demand) a significantly more by adding FSD when its available. Some fleet type operators might even be scrounging them up from people on the used market to add FSD and turn them into taxis. Much of the residual value is based on the fact that an older car will require a lot more maintenance. This is not true for the model 3. No timing belt, no 100,000 mile tune up, no catalytic converters. I could go off for hours but I think you get the point, but the maintenance costs of a car are almost as much as a payment once they are 8+ years old. I believe the residual value of the model 3 will be MUCH MUCH higher then any car in its segement and by default a Model 3 has a higher starting price. But even if you have the Camry and Model 3 depreciate at the same rate, the model 3 is still worth much more even without all of the above mentioned.

The vast majority of cars sold today do not having timing belts.

Honda has not sold a 4-cylinder car with a timing belt in the US since 2005, when the D-series motor was finally phased out. R, K, and L series motors all use timing chains. While Honda's J-series V6 uses a timing belt, it is being replaced by turbocharged K-series motors that use timing chains. Toyota has similarly moved away from timing belts. Almost every Toyota built in the past 10 years uses a timing chain that does not need to be replaced: Does my vehicle have a timing belt or timing chain?

100,000 mile valve checks don't necessarily result in any work needing to be done. One of my Accords did about 180k miles without needing a tuneup. It ran just as well and as efficiently as when it was new. It would probably still be running today if it hadn't been hit and totaled by an unlicensed driver. Still had the original cat too. Now, stuff did need to be repaired. Rubber coolant hoses cracked and needed to be replaced. Electronics failed (airbag computer broke after 12 years). Small motors that controlled power accessories wore out. Shocks started to go bad. The thing is, Tesla vehicles also have these components, and I don't think they are immune to failures of these kinds over the long haul. Corrosion is also a concern. Less so in the Model S and X, which are overwhelmingly aluminum, but Model 3 has steel unibody components that could be susceptible to corrosion. There are plenty of Mazda and Honda cars out there that still run, but are rusted out to the point where they can't pass inspection.

I agree that FSD could add a lot of residual value to Model 3, but it is my belief that people may be drastically understating Model 3's future maintenance costs. We just won't know for at least a decade how this will pan out.

 

[cab]

In your case, it seems like the main thing the 3 has to offer is Autopilot and eventually FSDC. Whether those are enough to be worth the cost difference and the other tradeoffs you noted, you'll have to decide. After the last 20 months, I'd find it very hard to buy a car without AP or something comparable in the future, but not everyone feels that way.

Agreed. When I purchased the CPO P85+ 20 months ago I thought long and hard about getting a new base model S. I test drove more than once and tried out AP. I decided I would rather have the extra options and power over AP. I have since had AP on a couple of loaners, and that hasn't changed my mind. While I think it is really cool, I work from home and don't have to deal with rush hour, stop and go traffic where, I admit, it could be "life altering" for some folks. I find I like the "idea" of Autopilot more than the actual real life implementation (i.e. great adaptive cruise, with OK auto steer) in MY use case.

Indeed, I wonder how many folks if their car did not have AP day one would write a $5k check for it after-the-fact when they can't just bury the cost in their monthly loan payment. I know I would have a TOUGH time justifying that number as a standalone purchase (even whenI did commute)... of course, I could say the same about a ton of other things on cars too when it comes to options, powertrains and trim levels!!! (Honey, I really do need an M5 instead of a 530i...).

 

[S4WRXTTCS]

OP,

When you canceled the order were you able to order the car? If you did you might have left money on the table.

I can certainly understand cold feet as buying my 2015 70D was the hardest car buying decision of my life. But, in that situation if I screwed up it meant money down the drain.

With the Model 3 how much money is really at risk? You're in Oregon so there isn't a sales tax (unless there is some special one on vehicles that I don't know about). You can likely sell it for equal to what you paid for it, and still keep the tax credit. That means walking away with cash in your pocket if you don't fall in love with it.

You do bring up important concerns, and I share some of them (the UI/UX issue). But, I'll likely order once the AWD version comes out because I don't see a whole lot of downside. There are hundreds of thousands of people behind us in line just waiting.

 

[SageBrush]

(1) The maintenance costs in the Toyota Camry are listed as $495 in the first year, $443 in the second year, and $443 in the third year, for a person driving 13,476 miles/year. This seems excessive to me.

Is that per the Toyota recommendation ?

It might be correct, but it presumes service at the dealership which of course is not required.
I have owned Toyotas for ~ 15 years now (all hybrids) and perform the simple maintenance.
The running costs of maintenance + repairs has been astonishingly low, way under 1 penny per mile. The Prius v(agon) I recently sold cost $600 for 100k miles, and that included tyres and an extensive service prior to sale.

 

[seattlite2004]

OP,

When you canceled the order were you able to order the car? If you did you might have left money on the table.

I can certainly understand cold feet as buying my 2015 70D was the hardest car buying decision of my life. But, in that situation if I screwed up it meant money down the drain.

With the Model 3 how much money is really at risk? You're in Oregon so there isn't a sales tax (unless there is some special one on vehicles that I don't know about). You can likely sell it for equal to what you paid for it, and still keep the tax credit. That means walking away with cash in your pocket if you don't fall in love with it.

You do bring up important concerns, and I share some of them (the UI/UX issue). But, I'll likely order once the AWD version comes out because I don't see a whole lot of downside. There are hundreds of thousands of people behind us in line just waiting.

Would you still order the AWD without the Fed Tax Credit and the WA State sales tax exception vs RWD and and full tax credits and exemption?

 

[NerdUno]

Bottom line for me would be that Elon pitched it as a $35K car that you were going to make a fortune on by setting up your own little Uber service while you were busy at work. By the time you get it the way you would want a Model 3 to be, it's 50% more with no autonomous Uber EVER. If money is no object, go for a Model S or X without all of the Model 3 quirks... if you can stomach Elon's endless "puffing" (to put it charitably).

 

[omgwtfbyobbq]

After following Tesla for 16 years, I've concluded that the Model 3 is not the car I've been waiting for and the Model Y doesn't look any better (we do know it will be on the Model 3 sled). It's too large, too expensive (how about that unicorn SD?), and too much of a gadget. Yes, OTA updates are cool, but jamming most of the functions into the software interface is a serious safety hazard. I don't want to have to take my eyes off the road while hunting through menus. Sure, once the interface stabilizes and I'm up on the learning curve, that isn't a problem, but until then it's flat out dangerous.

Maybe if I was younger and used to texting while driving instead of watching the road, this wouldn't bother me so much.

I wouldn't do anything that requires me to take my eyes of the road for more than a second, but that applies to any car. I can see how someone would be more comfortable with buttons than a touchscreen, but with sufficient training and muscle memory I don't see why it wouldn't be as safe as any other car. Granted, since it's new, people will need to learn based more on their memory of where buttons are as opposed to being able to physically feel a button, but I think that's viable for most.

 

[S4WRXTTCS]

Would you still order the AWD without the Fed Tax Credit and the WA State sales tax exception vs RWD and and full tax credits and exemption?

The WA Sales Tax exemption is ending soon. I'd probably have to order today to get a chance. The $7500 federal tax rebate I think I can safely get with AWD assuming that doesn't get delayed too much from the Mid 2018 date.

If I didn't have a Tesla at all my answer to your question is I still would even without the tax credit/exemption. The whole experience is too great not to advocate for it. But, I'd argue to get it without AWD because I don't strongly believe it is essential. Plus the tax credit + exemption is so much that it pays for the LR option.

I tend to be pretty obsessed with AWD though so it makes following my own advice (get it without the AWD) a little hard.

 

[anticitizen13.7]

Is that per the Toyota recommendation ?

It might be correct, but it presumes service at the dealership which of course is not required.
I have owned Toyotas for ~ 15 years now (all hybrids) and perform the simple maintenance.
The running costs of maintenance + repairs has been astonishingly low, way under 1 penny per mile. The Prius v(agon) I recently sold cost $600 for 100k miles, and that included tyres and an extensive service prior to sale.

I don't know, but I have a very hard time believing that Toyotas recommend $1300 in maintenance over the first 3 years, when my experience with Honda has been extremely low maintenance in the same time frame. Looking over my spreadsheet of maintenance items for my cars (oil, brakes, fluids, and more), I just do not see anything that would justify a high level of expense for a car that is nearly new and accumulating average miles/year.

Also, as I noted in a previous post, Toyota includes the first 2 years maintenance for free. Even if there was some kind of expense, it would cost the driver nothing extra for the first 2 years. Something is not right with Munger's analysis.

 

[omgwtfbyobbq]

Bottom line for me would be that Elon pitched it as a $35K car that you were going to make a fortune on by setting up your own little Uber service while you were busy at work. By the time you get it the way you would want a Model 3 to be, it's 50% more with no autonomous Uber EVER. If money is no object, go for a Model S or X without all of the Model 3 quirks... if you can stomach Elon's endless "puffing" (to put it charitably).

Wait, what? Even the smaller battery/base version would still be $42k+ with EAP/FSD. If you thought you could get EAP./FSD standard in the base car, I dunno what you were smoking, but I want some! Also, to be fair, even $35k when a car is announced isn't $35k if it's built several years later because of inflation.

I have to admit, ignoring inflation is one of my pet peeves. For instance, the CA high speed rail project was recently delayed by 4 years, probably because of The Tanchurian candidate and no support from the federal government. Because construction estimates are in this case estimated based on the year different parts are built, any delay is going to increased absolute costs even if real costs stay the same because of inflation. Course, that's seldom mentioned in the popular media...

Cost for California bullet train system rises to $77.3 billion

 

[SageBrush]

I don't know, but I have a very hard time believing that Toyotas recommend $1300 in maintenance over the first 3 years

Here is the break-down per Edmunds:
2017 Toyota Prius 1.8L 4-cyl. Hybrid CVT Automatic True Cost to Own

Here is another study
The Most and Least Expensive Cars to Maintain | YourMechanic Advice
Over 10 years they estimate an average of $430 a year for maintenance for the Prius, and that is the lowest cost car they found.

 

[N5329K]

I can see how someone would be more comfortable with buttons than a touchscreen, but with sufficient training and muscle memory I don't see why it wouldn't be as safe as any other car.

A contextual display makes that hard. When buttons, erm, icons move around depending on what page is on the screen, muscle memory becomes pretty difficult to invoke.
Robin

 

[omgwtfbyobbq]

A contextual display makes that hard. When buttons, erm, icons move around depending on what page is on the screen, muscle memory becomes pretty difficult to invoke.
Robin

It's a little harder, but the same applies to existing cars, like the gen II Prius, or even older cars (eg hold down buttons to access different functionality in radios). I'm fine with the 2nd gen Prius HVAC menu, and if anything it's the older, smaller, less responsive touch display being farther away that's the issue, not the context dependent touch screen.

Another advantage that Tesla has is using the buttons on the stalk as modifiers. Other manufacturers can do this, but they haven't. For instance, I can make a couple presses to access the wipers, or hit the stalk once and then hit the touchscreen once to set the speed/set to auto. I'm guessing a lot of what people are complaining about will be mapped to an existing function in a way that streamlines the UI (a la shift/ctrl/alt+$button on a computer).

Some stuff, like opening the glove box, will probably always be a couple menus deep, but the position of most gloveboxes should I think discourage drivers from accessing them while they're driving regardless of how they open them.

 

[Reciprocity]

Your lease for a minivan is not a lease for a Toyota Camry. Toyota Deals | New Toyota Incentives & Special Offers Toyota leases cover normal factory maintenance for the first 2 years. There is no "required maintenance package" for this car. $1300 for regular maintenance on a car of this type is absurd.

I have driven Civics and Accords for the past 25 years, and have followed the maintenance schedules precisely. I have never, ever, spent $1300 in the first 3 years for maintenance.




The vast majority of cars sold today do not having timing belts.

Honda has not sold a 4-cylinder car with a timing belt in the US since 2005, when the D-series motor was finally phased out. R, K, and L series motors all use timing chains. While Honda's J-series V6 uses a timing belt, it is being replaced by turbocharged K-series motors that use timing chains. Toyota has similarly moved away from timing belts. Almost every Toyota built in the past 10 years uses a timing chain that does not need to be replaced: Does my vehicle have a timing belt or timing chain?

100,000 mile valve checks don't necessarily result in any work needing to be done. One of my Accords did about 180k miles without needing a tuneup. It ran just as well and as efficiently as when it was new. It would probably still be running today if it hadn't been hit and totaled by an unlicensed driver. Still had the original cat too. Now, stuff did need to be repaired. Rubber coolant hoses cracked and needed to be replaced. Electronics failed (airbag computer broke after 12 years). Small motors that controlled power accessories wore out. Shocks started to go bad. The thing is, Tesla vehicles also have these components, and I don't think they are immune to failures of these kinds over the long haul. Corrosion is also a concern. Less so in the Model S and X, which are overwhelmingly aluminum, but Model 3 has steel unibody components that could be susceptible to corrosion. There are plenty of Mazda and Honda cars out there that still run, but are rusted out to the point where they can't pass inspection.

I agree that FSD could add a lot of residual value to Model 3, but it is my belief that people may be drastically understating Model 3's future maintenance costs. We just won't know for at least a decade how this will pan out.

My Honda minivan has a timing belt and is has less then 100,000 miles and is falling apart. It needs so much work. I'm just nursing it along because I use it like a pickup truck now that I have 2 Tesla's. It probably needs more work then the whole vehicle is worth. My 30,000 mile model X so far is $70 for a tire rotation and a set of $800 tires. I figure if I'm going to have to replace them so often, I'll try some cheaper tires. If they really suck, I'll go back to the Continentals.

 

[david_42]

@david_42 So what are you looking at now? There are certainly more PHEV/EV choices now compared with what was available 2 years ago when the Mod 3 was announced. Clarity, Ioniq, Kona, Prius, Bolt, Mission E, I-pace, other?

Right now, the 2019 Leaf looks like the best fit. 2019, because it will have thermal management. Big vs Big: the Leaf is shorter and narrower, but it has more interior space than the Model 3. The charge point is in front, the technology package is half the price of Tesla's EAP and all of the software works, now.

Have I been paying attention? Yes, the latest push back on the SD model was the last straw. As a stockholder I am concerned that Tesla has set themselves up for a major class action suit. They have been advertising a $35K car for almost five years ($27K with the tax credit) and there are probably tens of thousands of people who made reservations based on that price point, but I will be surprised if it happens. Even if it does, no one buying the SD will get more than a sniff of the tax credit.

 

[eSpiritIV]

After following Tesla for 16 years, I've concluded that the Model 3 is not the car I've been waiting for and the Model Y doesn't look any better (we do know it will be on the Model 3 sled). It's too large, too expensive (how about that unicorn SD?), and too much of a gadget. Yes, OTA updates are cool, but jamming most of the functions into the software interface is a serious safety hazard. I don't want to have to take my eyes off the road while hunting through menus. Sure, once the interface stabilizes and I'm up on the learning curve, that isn't a problem, but until then it's flat out dangerous.

Maybe if I was younger and used to texting while driving instead of watching the road, this wouldn't bother me so much.

I also have problems with the location of the charge point, the fragile frunk lid, and being a beta tester for critical software; to name a few more points.

I certainly hope other people maintain their level of enthusiasm, so the stock price will continue to rise. Some day I'll buy an electric car using the profits, but I really don't think it will be a Tesla.

2006 member jumping ship!!!
Well i am sure in 2 years you will have more options to choose from....

 

[anticitizen13.7]

My Honda minivan has a timing belt and is has less then 100,000 miles and is falling apart. It needs so much work. I'm just nursing it along because I use it like a pickup truck now that I have 2 Tesla's. It probably needs more work then the whole vehicle is worth. My 30,000 mile model X so far is $70 for a tire rotation and a set of $800 tires. I figure if I'm going to have to replace them so often, I'll try some cheaper tires. If they really suck, I'll go back to the Continentals.

As I mentioned in my post, the J-series V6 still uses a timing belt (incidently, with a 7-year, 105k service interval). Is this a 4th Generation (MY 2011-2017) van? That particular incarnation has a reputation for not being as polished as others. The design team on this one was the first to be entirely North American based.

 

[JohnSnowNW]

Right now, the 2019 Leaf looks like the best fit. 2019, because it will have thermal management. Big vs Big: the Leaf is shorter and narrower, but it has more interior space than the Model 3. The charge point is in front, the technology package is half the price of Tesla's EAP and all of the software works, now.

Have I been paying attention? Yes, the latest push back on the SD model was the last straw. As a stockholder I am concerned that Tesla has set themselves up for a major class action suit. They have been advertising a $35K car for almost five years ($27K with the tax credit) and there are probably tens of thousands of people who made reservations based on that price point, but I will be surprised if it happens. Even if it does, no one buying the SD will get more than a sniff of the tax credit.

Not sure what the grounds would be for a class-action lawsuit over the price of the Model 3, when reservations are refundable...but the US is pretty litigious.

I absolutely hate that the charge port is at the front of our LEAF, but to each their own. I do think the 2019 LEAF sounds like a great vehicle, if you aren't going to use it for long distance travel often.

 

[drawfour]

They have been advertising a $35K car for almost five years ($27K with the tax credit)

I don't think Elon ever said that the $35k version would get the $7500 tax incentive. That was the press/bloggers/coworkers/friends discussing that. That's not on Elon, and it's not on him to correct them, either.