Gas vs Tesla

[jpereira95]

Hello! So I've been wanting to get a tesla for a while now but I don't see the savings that everybody talks about in an electric car vs a similarly priced gas-powered vehicle. I currently have 3 vehicles, 1 financed and 2 leased. For the sake of this comparison, I will be using the example of one of my leases: a 2018 bmw x1 with all the stupid gadgets. A very overpriced "small suv" in my opinion that costs about $51k. The lease payment is $620, that includes everything with some extras (wheel protection, maintenance and any gear and tear) for the duration of the 3-year lease. Gas is only about $120 a month so that comes out to $740 without considering insurance.

The model 3 doesn't have a lease plan yet, but looking at the financed vs lease payments of the model s and model x they don't change much in pricing. Logically, the model 3 (I'm using the $51k performance model with no extras since its the closest one in value to the bemmer) will follow the same pattern so the lease will be basically the same as the financed monthly payment which is about $850 - $800. The x1 costs less than the monthly payment for a model 3 without counting the battery recharge cost on a monthly basis and any possible gear and tear that aren't included. The bmw x1 is already a pretty overpriced "small suv" while the model 3 is a sedan that is even pricier. Where are the savings? The model 3 is a smaller car and its still more expensive? Can somebody help me understand where the savings are?

Thank you

 

[ewoodrick]

The gas differential varies depending on your cost of electricity and the time of year. With 6 cent electricity and 4 miles per kWh, ImI paying less than 2 cents per mile.
I don't change oil, my first maintenance used to be at 2 years.
I've nade about 6000 mikes in long distance trips and have used just over $100 in Supercharger fees.

 

[jpereira95]

The gas differential varies depending on your cost of electricity and the time of year. With 6 cent electricity and 4 miles per kWh, ImI paying less than 2 cents per mile.
I don't change oil, my first maintenance used to be at 2 years.
I've nade about 6000 mikes in long distance trips and have used just over $100 in Supercharger fees.

Hey ewoodrick thank you for the response! That sounds great phenomenol but I'm trying to see where the savings are in an tesla before considering the cost of electricity. Their lease program is completely horrible because the payment of a $50k tesla is more than the payment and cost to run and maintain a $50k gas car so if you need to add the cost of electricity to it the tesla is still about $100 more per month.

 

[ewoodrick]

Leases are pretty simple to calculate, cost - residual value + some profit. What I suspect that you might be seeing is list BMW price against Tesla price, that's not fair. You need the sales price of the BMW against the Tesla.
The Tesla does have the advantage that the tax credit is built into the lease cost.

 

[srs5694]

I'm trying to see where the savings are in an tesla before considering the cost of electricity. Their lease program is completely horrible because the payment of a $50k tesla is more than the payment and cost to run and maintain a $50k gas car so if you need to add the cost of electricity to it the tesla is still about $100 more per month.

You're saying that the cost to lease a Tesla Model 3 IS terrible, but that's entirely hypothetical at this point, since Tesla isn't offering leases on the Model 3. You're extrapolating based on the lease prices for the Model S and Model X (without even showing your work), so we don't know if your extrapolation will be correct, if and when Tesla begins leasing the Model 3.

To do a true cost comparison today, you'll need to compare purchase prices. Without financing in the picture, that's dead simple: A $50K BMW costs exactly as much to purchase as a $50K Tesla -- assuming we're talking about the final negotiated price of both cars, including delivery fees, rather than list price. I don't know if a bank would charge different interest rates on a BMW vs. a Tesla; I suspect not, but that's just a guess. If I'm right, then that means that the purchase price, with or without a loan, would be identical.

Teslas currently benefit from a $3650 Federal tax credit, which is where the savings for Teslas begin; however, that credit will drop to $1825 on July 1, and to $0 on January 1, 2020. Some states also offer an EV tax credit or rebate, but many don't, so you'll need to research that for your state. Beyond that, you can compare gas costs vs. electricity, both of which vary regionally and with time; but as a general rule, it costs less to drive on electrons than on fossil fuels. Then you can compare maintenance costs. As a general rule, EVs require less maintenance than do ICE cars, but I can't say I've researched Teslas vs. BMWs, so I can't comment on that specific comparison. Tesla does tend to charge more for service than do many brands, but as it's less frequent, that could even out or favor the Tesla. Insurance could also go either way. There are two or three recent threads on insurance. Some states hit EVs with an extra registration fee/tax, ostensibly to compensate for the fact that they don't pay gas taxes. In some sense that's a negative for Teslas -- but gassers do pay a gas tax, so it's just a question of where you count that money in your accounting. Overall, in the short term the biggest single savings will be for the Federal and/or state tax credit, but as I said, the Federal tax credit is going away soon. In the long term, driving on electricity can save a fair amount of money, but maybe not enough to be a big deal on a ~$50K purchase.

Of course, if you prefer leasing, the Tesla Model 3 just won't be in the running, or at best will be at a severe disadvantage for you, unless you're willing to wait in the hopes that a lease option will eventually become available.

 

[ggr]

Hey ewoodrick thank you for the response! That sounds great phenomenol but I'm trying to see where the savings are in an tesla before considering the cost of electricity. Their lease program is completely horrible because the payment of a $50k tesla is more than the payment and cost to run and maintain a $50k gas car so if you need to add the cost of electricity to it the tesla is still about $100 more per month.

$100 of electricity is enough for a Model 3 to go 3000 miles. (Varies a bit but most people it's between 2-3 cents per mile.) Are you remembering to count the cost of gasoline for your $50k ICE? For a car comparable in performance to the Model 3, you're talking about 20mpg, 150 gallons, $400ish. Oh, at 3000 miles per month, you'll need 3 oil changes a year too.

 

[jboy210]

Take a look at you electricity bill and see what the cost for a KWH of electricity is. Be sure to use the off-peak/EV rate. Figure around 80 KWH for 300 miles of driving. Apply this to the miles per month you drive and you have the EV fuel costs. Compare this to the your month average cost for fuel per month. I bet you will find it is significantly lower. I have (really had, kid drives it now) 2016 BMW X3 with all the bell and whistles and it costs much less to drive my Model X which is much less efficient than a Model 3.

Then there is the convenience factor. With the an EV you charge at home like a cell phone. 10 seconds to connect, 10 seconds to disconnect. Tank is full every morning. No more planning a stop at a gas station. Just drive and never be concerned about the price of gas.

Also, here in California we can access the HOV lanes when driving by ourselves. And in the SF Bay Area that can save 30+ minutes each way on a 30 mile commute.

And as others have pointed out there is the maintenance. No oil changes, no transmission services, no smog re-certification, no ....
Now BMW has the cost of a 4 year maintenance plan baked into the lease price, but should you buy the car at the end of lease you will want a BMW North America maintenance plan for 4 addition years (repair only, does not cover routine maintenance) for $5,500. We have owned 5 turbo charged BMW 3s, and 4 of them have needed turbo charger/wastegate replacements by 70,000 miles. The average cost for this repair was around $6,500. Then there are the other things (transmissions, steering, etc) that have issues on BMWs.

 

[Phrixotrichus]

With 6 cent electricity and 4 miles per kWh, ImI paying less than 2 cents per mile.

Jesus friggin christ I´m so jealous.

We`re now at 0,3€ for one KWh in Germany and will be at 0,32 by the end of the year......

 

[J X 3]

The cheapest performance is 59.5k not 51k and if Tesla doesn't offer reasonable financing or leasing, don't take that.
Lease and financing are 2 very different things. With financing you pay for the entire value of the car while with a lease, you pay for the value the car loses in those number of years.

In general the cost of ownership is
- depreciation
- taxes
- fuel
- maintenance
- repairs
- financing
- insurance

At same base price, EVs have an advantage is depreciation, fuel costs, maintenance and repairs.
Depending on how much you drive and where you are, fuel savings will vary but an average is 1k$ per year. So over 5 years, would be 5k savings. You use 4 times less energy so in a functional energy market, you pay 4 times less for fuel.
Maintenance and repairs, can be maybe 2k in savings over 5 years.

Depreciation is more complicated and not really understood for EVs, even by professionals.
For ICE, the used car market is a few times higher volumes than new car sales. Because EVs are growing fast, there aren't many used ones and the new car sales vs used car sales ratio is quite different than ICE. So used EVs supply is low and that helps EVs retain value better.
As preferences shift towards EVs and more folks realize that EVs are better cars, EV desirability increases while it decreases.for ICE
One more thing, EVs growing will create an unbalance in the ICE market, the ratio between new sales and used cars sales. New ICE sales drop but for the used car market that's with a few years of delays so supply in the used car market doesn't fall in line with demand and that pushes prices down for used ICE.
Then you have low operating costs because of high reliability and low fuel costs.
So in terms of availability, desirability and reliability, EVs do better and will retain value better. The gap vs ICE will increase as ICE desirability falls.
All in all, over 3-5 years you can count on ICE losing and extra 15-10 % of their value. So a M3 might lose 35% of value over 3 years and 50% over 5 while ICE will lose 50% in 3y and 60-65% in 5years.
Do note that as mentioned before ,even professionals haven't really though this through properly yet. Or ICE car makers for that matter, some of them will be in real financial trouble when ICE depreciation accelerates. So what I am saying is forward looking and if you ask a professional about it, you also need to explain my reasoning.

In your case, if you prefer leases, you'll have to wait to see how Tesla prices it.
With ownership, a 35k Model 3 costs as much or a bit less to own as a 22k Camry or Accord.

 

[Uncle Paul]

In many cases, the lease prices are subsidized by the Manufacturer or dealership. Cut rate used to sell cars that have more manufacturing capacity than customers at full price.

Tesla does not currently subsidize leases as they are able to sell all they make at full price. This may change in the future if Tesla needs to offer a discount to move their cars.

 

[jpereira95]

Jesus friggin christ I´m so jealous.

We`re now at 0,3€ for one KWh in Germany and will be at 0,32 by the end of the year......

Yeah EV's in Europe are expensive to run in general. I'm originally from Spain and with how expensive the electricity is down there you are better off getting a hybrid or pure diesel

 

[jpereira95]

Hello!

I've read all of the comments and I don't think I'm explaining myself very well. I understand Tesla's are cheaper in the long run, less maintenance and gas savings. However, I'm trying to compare the "savings" for a 36 month period, which is typical for most leases. I'm fortunate to own a company so I can write off all my leases and therefore I'm not looking to finance or purchase a car any time sooner, unless its a steal I can make money from of course (eg. financing a tesla and then making some money when selling after only 3 years of usage)!

When doing leases I know companies trick consumers by playing with the residual value at the end of the lease and the down payment to manipulate the monthly lease cost.

Now with those things out of the way, to compare things as equally as possible I don't go into the insurance pricing as this varies on multiple factors, but for cars valued at the same MSRP price they basically cost the same to insured and therefore isn't important here. All the other numbers I've calculated are as follows:

Loan

• Downpayment = $7,500 (lowest quantity allowed by Tesla)
• Term = 72 months

Lease

• Downpayment = $5,000
• Miles = 10,000
• Term = 36 months

Lease of the BMW X1 = $50k approx.

• Downpayment = $5,000
• Miles = 10,000
• Term = 36 months
• Coverage = Any maintenance required, extra tire protection, gear and tear covered by the end of the lease
• Cost = $620/month
• Gas = Approx. $120/month
• TOTAL (all included) = $740/month

Hypothetical lease of Model 3 = $51k approx. (performance model with no extras since its the closest cost comparison to the bemmer)

In order to calculate this, I've compiled the costs of a loan vs lease for the Tesla Model S and Model X and used the pricing after savings in all comparisons. I understand a Model 3 program doesn't exist but if it ever does this is what the numbers would look like based on Tesla's leasing program in their other 2 existent models. I've included comparisons of all the different trims (long range, performance, ludicrous, etc) and calculated an average difference in cost between financed vs leased to estimate the Model 3 lease. Again, I understand this is an estimate and a projection but based on the data available this is the best comparison.

I wasn't able to upload more than 10 photos but this is the difference between each model:

• Model S (long range) = Lease is + $92/month
• Model S (performance) = Lease is + $119/month
• Model S (ludicrous) = Lease is + $158/month
• Model X (long range) = Lease is + 102$/month
  
• Model X (performance) = Lease is + 130$/month
  
• Model X (ludicrous) = Lease is + 169$/month
  
• AVERAGE LEASE COST OF TESLA = + $128/month

• Cost = $726 (current financed price after savings) + 128 = $854

Without even considering what Tesla's leasing program includes (gear and tear, tire protection, etc), which in most cases adds extra costs to the lease payment, or the electricity cost; the Tesla Model 3 is about $100/month more expensive than a BMW X1. Moreover, the bemmer is an "SUV" (small and sporty but still an SUV) and the Model 3 is a sedan. So like I said at the beginning with these numbers into consideration where are the savings if I want to change my car every 36 months? To me the Tesla is more expensive. Any clarifications?

 

[Matt L]

Hello! So I've been wanting to get a tesla for a while now but I don't see the savings that everybody talks about in an electric car vs a similarly priced gas-powered vehicle. I currently have 3 vehicles, 1 financed and 2 leased. For the sake of this comparison, I will be using the example of one of my leases: a 2018 bmw x1 with all the stupid gadgets. A very overpriced "small suv" in my opinion that costs about $51k. The lease payment is $620, that includes everything with some extras (wheel protection, maintenance and any gear and tear) for the duration of the 3-year lease. Gas is only about $120 a month so that comes out to $740 without considering insurance.

The model 3 doesn't have a lease plan yet, but looking at the financed vs lease payments of the model s and model x they don't change much in pricing. Logically, the model 3 (I'm using the $51k performance model with no extras since its the closest one in value to the bemmer) will follow the same pattern so the lease will be basically the same as the financed monthly payment which is about $850 - $800. The x1 costs less than the monthly payment for a model 3 without counting the battery recharge cost on a monthly basis and any possible gear and tear that aren't included. The bmw x1 is already a pretty overpriced "small suv" while the model 3 is a sedan that is even pricier. Where are the savings? The model 3 is a smaller car and its still more expensive? Can somebody help me understand where the savings are?

Thank you

Comparing a P3D to an X1 on price alone is your issue. A P3D is way more car than an X1. Your “savings” is the fact you aren’t being ripped off paying $51k for an X1. Seriously, an x1 is a $40k car with a BMW badge on it.

 

[jpereira95]

Comparing a P3D to an X1 on price alone is your issue. A P3D is way more car than an X1. Your “savings” is the fact you aren’t being ripped off paying $51k for an X1. Seriously, an x1 is a $40k car with a BMW badge on it.

Hey Matt! Thanks for the feedback. While I don't disagree with you (my girlfriend wanted the x1 not me, I do think its very overpriced) I based my analysis on the MSRP value of everything so based on that, the model 3 costs more per month than the other one even though their MSRP is basically the same.