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Total Cost of Ownership (Tesla and ICE)

Discussion in 'Model S: Ordering, Production, Delivery' started by mlh13, Jul 13, 2014.

  1. mlh13

    mlh13 New Member

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    Hi everybody,

    I've been working on a spreadsheet to try and find the true TCO using a net present cost analysis. I'd love to hear any questions, corrections, or improvements on the sheet I have. It's based off of a Khan Academy Rent vs. Buy analysis but has been retrofitted and improved for EV and ICE cars. I tried to put in a best guess for some of the numbers like maintenance, tires, fuel, etc costs, but it'd be great to hear some discussion of how accurate my numbers are. The costs are all allocated monthly so even costs such as tires which are one time expenses every X number of years are included monthly. However, I still feel this is far more accurate when combined with using present value of dollars rather than a TCO that does not take PV into consideration. I don't own a Tesla but am looking into the Model X.

    Thanks.

    View attachment TCO Tesla.xlsx
     
  2. green1

    green1 Active Member

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    From what I can tell, for my location, fuel cost on the Tesla is about 1/3 of my present costs, tire costs should be about 4 times what I pay now, other maintenance should be about the same as I pay now, insurance will likely more than double.
    And the base cost is about 8 times what my last car cost me.

    I want a Tesla, but I know for a fact that it will NOT save me any money.
     
  3. woof

    woof Model S #P683 Blue 85 kWh

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    Welcome to the Forum!

    I took a quick look, a couple of the numbers seem out of line to me.

    Wh/mi rating of 291...seems very optimistic, but it does depend on weather, topology and weight of ones right foot. EPA rating is 303. We are averaging 333 over 30K miles so far. Also, that number doesn't include the charging losses, meaning it's not a wall to wheels number that you can use to calculate operating costs. I think an additional 10-15% over that would be needed to include charging losses.

    I'm confuzzleded (not a difficult thing, mind you) about lines 37 and 50, both labeled "Cost of Electricity ($/kWh)" with with very different numbers in them.

    I also don't see anything about the $7500 Federal Tax credit.

    With PV, we find our fuel costs for two EV's to be more than 10 times cheaper than the equivalent gasoline cars (not that the Model S has an equivalent gas car...but we replaced a mini-van):
    40,000 miles in two electrically powered cars costs us $400 Annually.
    40,000 miles in two gasoline powered cars would've cost $4,800 Annually.
     
  4. mknox

    mknox Well-Known Member

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    Compared to what? The Model S is already priced very competitively against its competitors, and then there are the fuel and maintenance savings on top. FWIW, my insurance actually dropped (I was surprised too.)
     
  5. richkae

    richkae VIN587

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    Over the last 11 years gasoline has increased in price by an average of 8% per year.
    Electricity has increased at 3.3% per year.

    Since we don't know what the future will hold, it would be prudent to model multiple scenarios with "best case" and "worst case" numbers for those rates of change.
     
  6. green1

    green1 Active Member

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    Compared to any other vehicle I would be likely to drive. I put my rough numbers in my first post.
    The annual maintenance is similar to other cars in it's class, sometimes even higher (despite the theoretically lower costs of an all electric vehicle). While electricity is cheaper than gasoline, the cost is still about 1/3 - 1/2 of what I'd pay for gasoline based on what my utility charges, and factoring average wh/km and charging losses. Tires are not included in the costs, and according to Tesla, tires are supposed to last about 1/4 as long on this car as anything I've ever owned. (look up the multitude of threads about tire wear, especially on the 21" wheels, and the official responses from Tesla).
    Fuel cost is generally a fairly small portion of TCO, and it has to make up for everything else.

    The only way the Tesla is cheaper is if you were already planning to buy a $100,000 car. Something I would never consider. My normal cars are cheap, used cars, they are reliable, and in good condition, but I've never needed more than basic liability insurance, obviously with $100,000 car I'd need full coverage, that will add a lot to my insurance, and the initial purchase price is about 8 times the most I've ever spent on a car.

    There are many good reasons to buy a Tesla, but unless you normally buy extremely expensive cars, cost is simply not one of them.
     
  7. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    Of course, it also depends on how you like to spend your money. I really, really hate buying things that after you use them you only have a receipt (gas pretty much tops the list--inane lawn mowing that the city requires is another). I'd rather spend more money up front and less money each month--even if strict accounting might show the other way being somewhat less expensive).
     
  8. Ssssly

    Ssssly Member

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    Agree with your premise that a NPC is more accurate than TCO. Your foundation appears sound and I have the following feedback:

    -you should include more maintenance items as others have noted. Tires appear to be replaced more frequently while other items less.
    -I do not agree with your logic of including a replacement battery in your analysis unless you include an equal replacement for an ICE
    -In lieu of the above item you could include the extended warranty cost
    -as noted by others, you have not included the Federal rebate
    -I agree with richkae that your gas and electricity annual increase appear low. These are available from various sources.
    -you should update your wh/mi as noted above AND reference EPA MPG for more accurate input. Your 21mpg for a Tahoe is higher than the 18 mpg they list.
    -I feel you're depreciation model is too simplistic. There are many models available online based on mileage and age.

    You are welcome to use the input I've collected and linked here.
     
  9. mkjayakumar

    mkjayakumar Active Member

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    green1: "base price is 8 times as that of your last car ?"

    What cars do you buy for $10K ?
     
  10. Seven7

    Seven7 Member

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    #10 Seven7, Jul 13, 2014
    Last edited: Jul 13, 2014
    Well we would have to use a comparable ICE car, and the only one I could find that comes close to a Tesla P85 is a Mercedes-Benz S600 base price $166,900.-
     
  11. tnagpal

    tnagpal Member

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    Two thoughts:

    1. It has been done before quite a bit

    Beyond Ssssly's model, there is teslacost.com which has both an accounting and cash flow model already. I did a version of the teslacost model which is with what i thought were better assumptions. You can take a look here for that: https://dl.dropboxusercontent.com/u/712730/Tesla%20Model.xlsx

    2. All you can really say is that it is probably more reasonably priced than the initial cost suggests

    Because of the assumptions and biases of those putting together the models (which I suspect favor the Tesla because of people who are doing it want to buy one), it is really hard to say anything besides the Tesla is definitely cheaper than the initial price suggests and is probably in the ballpark of a lot of different cars. If I put together a more sophisticated sensitivity analysis - I suspect fuel costs and depreciation would be the only two drivers of NPV that really matter.

    An example of these types of biases: 10 years is probably too long an assumption period - and the reason why is that I expect that the technology will advance significantly in that time, so assumptions won't hold that long and it may make financial sense to get a new car sooner (e.g., car tech advances, fuel cells actually win or self-driving cars take over and car ownership ends up being a lot more expensive comparatively, or even that Teslas wear out fast for something that Elon and team overlooked) Plus once you are out of contract maintenance, maintenance costs would be really hard to guess on a Tesla.
     
  12. richkae

    richkae VIN587

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    It is not reasonable to compare the 21" ultra high performance tires to another car with all seasons.
    Compare the base 19" tire. The wear is much less.

    An average new car purchased today will equal the purchase cost in gasoline in about 11 years. That is very significant.

    If you are buying cheap used cars ( and actually driving them the average amount ) then your fuel cost is very likely the majority of your expense, not the least.
     
  13. bonaire

    bonaire Active Member

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    Someone selling a used Camry for $8k and buying a new, say Nissan Leaf, still has a big monthly cost if they are paying a car loan for the $30K total sticker + taxes and destination. They would be better to keep the Camry and maintain it. Most EV buying decisions for "cost savings" are very hard to pencil in when compared to maintaining an ICE. In my area, electricity is roughly .17/kWh in mid-summer. That means a homeowner could get 3 miles per .17 or $5.66 per 100 miles in an EV if you get about 300 Wh/mile. I am factoring in some charging losses there. In an ICE, at 40mpg, which is somewhat rare, it would cost about $10 per 100 miles at $4 gasoline prices. Drive 10K a year and the savings is 100 * 4.34 or $434 per year when comparing an EV to ICE if you compare against a 40mpg car using regular gas with those parameters. But that driver would have saved 250 gallons and felt good about their choice. Buying an EV for its smooth torque, lack of maintenance and general good-idea-to-do is why many make the choice. But I really don't think many do it thinking they are saving money.

    I computed out a cost of ownership for a Tesla, taking into account purchase, insurance, electric charging at home and more. It pencils out to over $1/mile TCO if you use 40K miles over 3 years depreciation + input costs. If you drive less than 40K per year, it could even be more.

    One of the cheapest ways to get into an EV is buying a used one. Say a used Leaf or Volt at $18K with maybe 60K miles on it. You get the same mileage as buying new, should offer somewhat low maintenance and the buyer does not have to pay off the lot pricing or write a high monthly loan check. I know a Volt driver who is waiting for the 3-year cycle to buy a used Tesla for that very reason.
     
  14. mknox

    mknox Well-Known Member

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    Right. All bets are off if you're comparing to something completely out of its class.

    One other thing to keep in mind is that an electric drivetrain is more efficient than an ICE. Consider that an 85 kWh can go up to 300 miles (265 rated) and that 85 kWh of electricity contains roughly the same energy as 2.3 US gallons of gasoline. How many ICE cars can go that far on 2.3 gallons?

    My previous car was a Cadillac CTS. Much less expensive than the Model S. But the Model S + electricity is working out to be less expensive overall than the Cadillac + gasoline was.
     
  15. roblab

    roblab Active Member

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    Well, yes, and no.

    We tried to help a girl near us buy a first car. First, the car was old. Looked old. No sexy factor. Second, the car was old. Far less safe than a newer one (how do you value safety?) Third, the car was old. Every time we turned around, something was not working. New AC repair, over $1000. New catalytic converter, $1000. Radiator flush, fix flat spot in brake drum, replace front bearing. Car smells when the sun heats it up (pets?) Fourth, the car was old, and less reliable, which might be the number one reason for having a car in the first place. Then there was having to teach the girl about oil changes and checking levels (auto trans fluid was brown, not a good sign) and tire checking and flat fixing. Fifth, the car was old. How long would it last compared to a new Leaf? The used one was cheap because it WAS used.

    She finally gave up and we got rid of the "old" car and she will probably wait another year. But it wasn't cheap. Just in "helping", we lost over $1000.

    Ah, What are friends for?
     
  16. bonaire

    bonaire Active Member

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    roblab - in terms of old, I am talking about 3 year old used cars, not 10+ year older clunkers. For example, find a used 3-year old off lease car with 30-36K miles on it. Clearly, the price will be 60% or less of the original MSRP. Older doesn't mean unsafe other than newer cars have side-curtain air bags and different style crumple zones. In the year 2008, people would have written your exact reply talking about cars prior to 2008. So, buying a 2008 used model now with low miles might also be a good choice. Pay $8k and if 2-4K more in repairs comes along, still far cheaper than a new car. My mother got "taken" by a small garage shop - she was about 89 years old and sold her old Toyota Solara to them for $3500. I have since lost her but at the time, the right discussion would have been with me to figure out whether her grand-children would buy it from her for them to start learning to drive in. In other words "you could have gotten a fantastic deal on a used car for under $4K if you were on the other side of that trade."

    I view sustainable transportation in a number of ways. One is buying and keeping a car for 10 years and not revisiting for a new lease every 3. Second, buying as fuel efficient a car as you can afford. Third, try to buy used EVs. Fourth, if you can afford new EVs, buy them. Perhaps buying a 3-year old Tesla and keeping it for 10 years and hopefully not needing any off-warranty repairs (ie. drivetrain or whatever) would be a fantastic choice.
     
  17. mlh13

    mlh13 New Member

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    First of all, thank you for all of the constructive replies. First thing I'd like to say is my eventual is to build a model so that people can calculate TCO for both EV and ICE on an easy to use, but comprehensive spreadsheet. I've deleted the 'Tahoe' page for a while so I can get everything else straightened out. I'd like to reply to a couple of responses.

    To Woof, thanks for the great feedback!
    1. The 291 Wh/mi I got from Teslamotors.com, but I have updated the sheet with the EPA and anecdotal numbers
    2. I'll look into and include charging losses in the next update
    2. Cost of electricity confusion has been fixed (one was price)
    3. I've added to the $7,500 federal tax credit, I was going off the Tesla price shown on Teslamotors.com which includes the number but I can see how this is misleading. Can someone tell me if this is applied at the dealership or later? i.e. should it be 20% of the full cost for downpayment or the cost minus the tax credit for the car note?

    Ssssly, thanks for your response!
    1. To improve ease of use I've used maintenance numbers from AAA specifically so other users of the sheet don't have to estimate all of the services that your sheet provides. Your sheet is probably more accurate but I'd like non-car people to be able to easily use my model.
    2. The replacement cost of the battery for an ICE is included in the maintenance cost / mile which is why I didn't include it, and this is why the maintenance cost of the Tesla is significantly lower than any ICE. Not saying I'm right on what the Tesla maintenance cost is per mile, but that's my reasoning. I'd love comments on a more accurate number.
    3. I'll look into the extended warranty cost instead of the maintenance cost. This has issues like maintenance cost after the warranty runs out.. FYI AAA claims their warranty costs include the costs of a comprehensive warranty.
    4. I've added in EPA to MPG
    5. I'll look into more complex depreciation models, if there is a 'gold standard' I'd love to hear it, but I doubt there is.
    6. In a future model, with your permission, I'd like to include your 'Options' to total cost portion of your sheet.

    Others
    1. I will research and include more realistic trends for electricity and gasoline cost increases
    2. My current car is 1999, so 10 years is not unrealistic for me personally

    View attachment TCO Tesla 1.1.xlsx
     
  18. smsprague

    smsprague Member

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    Another note - maintenance is relatively high on a Tesla at $1900 for the 4 year plan - about the same as a 85K Mercedes CLS550 pre paid plan - so no savings on that either
     
  19. MattMDK

    MattMDK Member

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    I have driven 4,200 miles in my Tesla and agree that gas was costing me close to 10x what I have paid for electricity.
     
  20. Ssssly

    Ssssly Member

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    You may use anything you find useful.
     

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