Financial Feasibility

[Langzaiguy]

I know there's a few threads going about this topic. I've read them and they've been helpful. I was hoping that a few of you could take a look at the 10 year cost analysis I have drawn up. A little about me: our annual household income is about $75,000. We have no debt but our mortgage. My daily commute is about 90 miles, and I we travel about 35,000 a year. My logic is that the money saved in gas and maintenance would be cover the premium in price that I would pay over an ICE.

I hope my spreadsheet is somewhat readable. It shows two different plans. Plan 1 is how I would proceed if we did not purchase a Model S. It shows our current Corolla with a purchase of a used 4Runner. Plan 2 we would purchase a Model S and keep our Corolla. Plan 1, the Corolla would bear the bulk of our miles, and Plan 2 the Tesla. Since it is a 10 year analysis, I figured I would have to earmark additional money for a battery replacement. I have added in $12k in Plan 2 to accommodate this.

From what I can tell, I would save $500 a year with a Model S.

Spreadsheet:
tesla_procon5.xls - Google Drive

Thanks for any insight!

 

[riceuguy]

I would factor an extended warranty into all cars in both models.

 

[Tesla 940]

I would factor an extended warranty into all cars in both models.

Why would you buy an extended warranty on a Toyota? Toyota's have one of the best repair records in the industry. If you even have to THINK about an extended warranty - why would you buy the car? Also, extended warranty's are nothing but huge money makers for the dealership.

I don't even have to look at the spreadsheet to know that a Model S will ultimately cost more than and ICE (especially a Toyota). The depreciation alone will be the deal killer. EVs are still for early-adapters and therefore any decision based soley on $$$ is flawed.

 

[metafor]

I'd say the depreciation for the Model S would be significantly less than any ICE. The only things that really wear over time are the brakes, battery, air suspension and auto-extending door handles. Those really are pretty cheap to replace -- the battery surprisingly so for ~12k.

The primary depreciation for most ICE's is the engine wear and tear along with all the other mechanically moving parts; that doesn't exist on the Model S. If you take good care of the car, it should be in no worse shape in 10+ years than when you bought it.

 

[Zextraterrestrial]

Pure Joy is worth a lot of $$$
& Silence is Golden!

 

[sp4rk]

The Model S is not something that anyone can justify financially. Not yet. Too much fun for that!

Just like if you were looking at any ICE costing north of $75k or $100k. ICE consumers buy them because they can (afford) to.

Having said that, your argument would make a lot more financial sense if you were comparing the "S" to the S550.

I think you'll find that everyone taking delivery of "loaded" S's, are doing so mainly due to environmental reasons; the feel good factor of being "responsible", and the rush of "silent energy". Not to mention being early adopters!

You might also think about a Leaf? I have driven one since May and love it. As an interim car. If the S weren't around (my) corner, I would drive it into the ground.

I am "graduating" to the S for, admittedly, more range, aluminium form factor (less or no rusting), more bells and whistles.

And overall confidence in Tesla Motors and Elon Musk.

And the sheer thrill of driving the most sensible, awesome, and by chance, yes, expensive car ...

Yet the people I have met who are buying do not come across as being ostentatious at all.

They just, like me and most here, tend to ramble on about it a bit ... like me now!

 

[mknox]

The depreciation alone will be the deal killer. EVs are still for early-adapters and therefore any decision based soley on $$$ is flawed.

Ran across this article that suggests EV depreciation won't be that bad....

 

[sp4rk]

Ran across this article that suggests EV depreciation won't be that bad....

We're really buying a bunch of batteries, not a car, I know!
I look at depreciation as a double edge sword. The car will not depreciate as much due to the amount of alloy (aluminium) used. And software updates. And next buyers limited amount of fixing to do.
On the other hand, as battery technology improves, range increases, we're looking at $30k in 10 years that's basically gone BYE BYE.
Or, barring interest if you have a loan or lost interest on investment, $250 a month.
But if we still have 50% of more capacity working ... I could keep going on but then I'd be cost justifying it!

 

[richkae]

I don't even have to look at the spreadsheet to know that a Model S will ultimately cost more than and ICE (especially a Toyota). The depreciation alone will be the deal killer. EVs are still for early-adapters and therefore any decision based soley on $$$ is flawed.

I'm sorry but this is flat out wrong.
I can't access the original spreadsheet, but the details are important.
350,000 miles over 10 years is a lot of miles - it is almost triple the average driver, and the cost of gasoline may be greater than the depreciation of either vehicle.

Picking any one number for gasoline price is hard, you need to pick a few scenarios and decide what you think the likelihood of each is.
350,000 miles at 30mpg and a low average gas price estimate of $4.88 per gallon is $58933 ( $3.62 at start, 6% rise per year )
350,000 miles at 30mpg and an average gas price of $5.71 per gallon is $66706 ( $3.62 at start, 8% rise per year )
350,000 miles at 30mpg and a high average gas price of $6.50 per gallon is $75888 ( $3.62 at start, 10% rise per year )
( If you look at the last 10 years, the average increase in gasoline price per year is 10%! and the average price of regular gasoline all formulations over the last year is $3.62 )

 

[Zaxxon]

I know there's a few threads going about this topic. I've read them and they've been helpful. I was hoping that a few of you could take a look at the 10 year cost analysis I have drawn up. !

I've actually been working on a similar spreadsheet comparing a Model S to a few other options I and a friend were thinking of:

Of course any comparison like this is only as good as the assumptions made to generate it, but my take-away is that a Model S can be a much better financial decision than it appears at first glance. In my case, a mid-range $74k Model S, with the prepaid maintenance/warranty for 8 years looks to be cheaper over 8 years/125k miles than several alternatives in the $35k-$45k range. This would not be the case without the Federal tax credit, and would be less the case without my state's additional credit, but I was surprised that it works out cheaper in *any* case.

Some of the key assumptions that I made are below (feel free to challenge these, folks--I'm trying to make my comparison as accurate as I can, and with a comparison this detailed [and one that I probably have confirmation bias on] there's always the chance that I'm overlooking or miscalculating some aspect).

-Gas at $4/gal average over the next 8 years
-Energy at $0.09/kWh average (this is my local area's 'top' rate currently)
-283 wH/mi for the S (this has a very low impact on TCO even when raised significantly)
-S insurance slightly higher than the other models in my comparison, which seems to jive with what folks are reporting here and elsewhere
-8-year, 125k mi ownership period
-My state's registration costs
-Depreciation of 70% over 8 years (this is probably the least-reliable assumption, but it's about right based on my research of 'traditional' ICE cars, and I hope that an S would depreciate no more than that given that a new battery 8 years from now would make the vehicle's powertrain 'good as new' much moreso than is possible on a 'traditional' vehicle)
-Maintenance for Tesla is the full pre-purchase. For other vehicles it's estimated based on Edmunds.com data.
-Range loss of 30% over 8 years (which is what Tesla told me to expect as a safe worst-case and what I planned my pack selection based on)

 

[Tesla 940]

Ran across this article that suggests EV depreciation won't be that bad....

If depreciate isn't going to be such a big deal - then please explain how a $125k Roadster that is only 3-4 years old is now worth half of that or worse. Or how a $150k Roadster that is only 2 years old is only worth $80k.

While automobiles are not computers - at least they look different - do you really think someone will pay "top dollar" for a 10 year old Model S / Computer? What is that 3 year old laptop or IPad worth today??? I thought so! I suspect that a fully loaded S will retain its value better than a stripped down 40 or 60 Model S but with syling changes, battery tech enhancements, and computer tech improving everyday - do you really think a 40 or 60 is going to be worth much in 5 years let alone 10 years??? Do you think YOU will be content to drive 5 or 10 year old technology? Like technology in general - it will be cheaper to buy new that to even begin to try to upgrade existing tech.

As for all the things that "aren't suppose to wear out" such as the electronics etc. - there are many things EVs have in common with ICEs - paint, interior, etc. Cosmetics sell - drivetrains don't!

 

[metafor]

If depreciate isn't going to be such a big deal - then please explain how a $125k Roadster that is only 3-4 years old is now worth half of that or worse. Or how a $150k Roadster that is only 2 years old is only worth $80k.

While automobiles are not computers - at least they look different - do you really think someone will pay "top dollar" for a 10 year old Model S / Computer? What is that 3 year old laptop or IPad worth today??? I thought so! I suspect that a fully loaded S will retain its value better than a stripped down 40 or 60 Model S but with syling changes, battery tech enhancements, and computer tech improving everyday - do you really think a 40 or 60 is going to be worth much in 5 years let alone 10 years??? Do you think YOU will be content to drive 5 or 10 year old technology? Like technology in general - it will be cheaper to buy new that to even begin to try to upgrade existing tech.

As for all the things that "aren't suppose to wear out" such as the electronics etc. - there are many things EVs have in common with ICEs - paint, interior, etc. Cosmetics sell - drivetrains don't!

It's not so much that it's "not a big deal" as that the depreciation will be significantly less than an ICE equivalent. Take the 2008 BMW M5, for instance. That retails for ~40k these days compared to its ~100k+ MSRP in 2008.

Obviously, whenever you buy a car in this price range, the value will tank over the first few years. But EV's tend to have better depreciation than ICE's. A good datapoint is the Nissan Leaf.

 

[Langzaiguy]

All the feedback is appreciated! Much of my frustration is pumping $65 in gas every week. That money is virtually being burned up. Buying a Model S may or (very likely) will not be a money saving measure. However, I would much rather "invest" that $65/week or $3000 to $4000/annually into a car that I can enjoy--something tangible. It's just redirecting cash from my tailpipe to my driving comfort.

Is my spreadsheet displaying OK?

 

[David_Cary]

Those assumptions

$10k for a Prius maintenance/warranty over 8 years???

I have a HCHII that is 6 yrs old and 85k. Not counting tires (not included in any calcs you have) has well under $1000 in maintenance costs

I bought a new 12 v battery for $60. I spend $40 on oil change and I've had 8 I think. I've done wiper blades once - I bet that was $20.

So grand total of $400 so I'd extrapolate to $500 for 8/125. So your guesstimate in my mind is 10 times too high. And wow - you are paying $37k for a Prius - that is really impressive but I guess that is the closest to the Tesla.

Either way, the Prius is now $16k less expensive instead of $7k. Also if you are getting 42 mpg for the Prius, then you aren't getting 283 kw/mile. Why not use the EPA numbers - more like 50 mpg and 340. Sure the electricity isn't much but the gas is a lot less- probably $2k. Then throw in the time value of money - even if it is only 3% nowadays.

All of a sudden a Prius is $20k cheaper - so $200 a month. So don't ever think the Tesla is an inexpensive proposition.

 

[Zaxxon]

$10k for a Prius maintenance/warranty over 8 years???

I have a HCHII that is 6 yrs old and 85k. Not counting tires (not included in any calcs you have) has well under $1000 in maintenance costs

I have a 6-yr old Prius with 102k and I would agree--I've spent much less than the estimates in my spreadsheet in maintenance. Those estimates were from Edmunds, which I view as a better estimate than my anecdotal (one-car) experience. It's very possible that they're high.

And wow - you are paying $37k for a Prius - that is really impressive but I guess that is the closest to the Tesla.

I should clarify--that's the Prius V, loaded (which is likely how I'd get it). MSRP $37k.

Either way, the Prius is now $16k less expensive instead of $7k.

Well, no. You're 6 years into your ownership, and 85k miles. These estimates are 40k miles and 2 years in the future. They may be high, but your costs from here to there would not be $0.

Also if you are getting 42 mpg for the Prius, then you aren't getting 283 kw/mile. Why not use the EPA numbers - more like 50 mpg and 340. Sure the electricity isn't much but the gas is a lot less- probably $2k. Then throw in the time value of money - even if it is only 3% nowadays.

42 is the EPA number for the Prius V--all the MPG numbers I used are EPA.

All of a sudden a Prius is $20k cheaper - so $200 a month. So don't ever think the Tesla is an inexpensive proposition.

Not with the actual math, it's not. But in any event, I wouldn't dispute that a Prius will work out cheaper--even my current assumptions bore that out by several thousand bucks. It was really in my comparison as a 'safe' eco-friendly car and as some insight into what my cost would be continuing my current (Prius-owning) trends. The question is whether driving an S instead of a Prius is worth that $7k to me--certainly it is.

What surprised me was the other models coming out so much more expensive than the Tesla, even with conservative guesses for gas @ $4. Pump that to $5 and things change quite a bit.

But I do appreciate you questioning my #s. That's why I posted them here--keep it up, folks.

 

[Zaxxon]

Re-reading my initial response, that came out harsher than intended. You raise some valid concerns with my #s, and I have the Prius V mislabeled as a plain-Jane Prius on my spreadsheet, which lead to your MPG/MSRP alarms. In any event, apologies for starting off on the wrong foot, David.

$10k for a Prius maintenance/warranty over 8 years???

I went back and re-checked the Edmunds maintenance/repair info for the V and I did indeed have it high. They still anticipate around $8k, but I agree with you that that's high. I've adjusted it down to $6,300 to match the Tesla because I don't think $8k is realistic. With some luck $6,300 is probably high as well, but I don't want to overreact. This does bring the V to more than $11k less than the S as I had it configured. It would then require a 40 kWh pack and $4.50/gal gas average for the Tesla to win out.

That's not the way that I'd like to own the S, but it does drive home even further that this vehicle is amazingly competitive with 'normal' cars considering what you get. At that config, it barely beats the Prius but destroys the other models by $19,500 to $31,500 in TCO.

To make things more conservative, if I also lower the rest of the compared vehicles' maintenance below Edmund's estimates accordingly, drop gas price estimates to $3.75 while raising the Tesla's espected wH/mi to 325 and reverting it back to my 60 kWh pack configuration, it still edges the non-Prius comparison vehicles by $2,300 to $4,500 in TCO. That boggles my mind.

 

[kendallpb]

Is my spreadsheet displaying OK?

I get an error that it can't be displayed:

"Sorry, we are having a temporary problem generating a view of the document. Please try again later."

I wouldn't be any help looking at it anyway (this stuff isn't my strength), so don't fix it for me, but I might not be the only one.

 

[Tesla 940]

Other factors to consider/adjust for:

1. Tires - my friend's AMG gets 20-25K on a set of rear tires and cost $700 a pair. This compares to $800 for a full set of 4 tires on my Toyota truck and they last 80K. I suspect the Model S will be similar to the AMG.

2. Electric - while your math is correct you are not considering that there is ~ 25% loss going from Grid to Battery. So your electric cost will be ~ $1,000 higher.

3. As others have noted -my maintence and repair on my 6 year old, 155k truck has been less that $5k.

4. Extended warranties (except maybe the Model S) is a big waste - they are hugely profitable to the dealers and are NOT recommended by Consumer Reports.

 

[logan]

Other factors to consider/adjust for:

1. Tires - my friend's AMG gets 20-25K on a set of rear tires and cost $700 a pair. This compares to $800 for a full set of 4 tires on my Toyota truck and they last 80K. I suspect the Model S will be similar to the AMG.

2. Electric - while your math is correct you are not considering that there is ~ 25% loss going from Grid to Battery. So your electric cost will be ~ $1,000 higher.

3. As others have noted -my maintence and repair on my 6 year old, 155k truck has been less that $5k.

4. Extended warranties (except maybe the Model S) is a big waste - they are hugely profitable to the dealers and are NOT recommended by Consumer Reports.

Man 20-25k for rear tires on an AMG is amazing. My C63 AMG gets 7,500 miles on the rear tires before they are shot. My CLS63 AMG is only slightly better.

 

[Tesla 940]

Man 20-25k for rear tires on an AMG is amazing. My C63 AMG gets 7,500 miles on the rear tires before they are shot. My CLS63 AMG is only slightly better.

My girlfriend is pretty easy on the gas and steering wheel (turns) - doesn't make sense to have an AMG when you drive like that but it was her choice - I'm not going there (again).

I periodically mention the Model S as something she should consider but she isn't biting - yet.