Hi everybody,
I've been working on a spreadsheet to try and find the true TCO using a net present cost analysis.
View attachment 53584
Just for the fun of it, I did a partial cost of ownership analysis. It was for the sake of those who insist that even a $35K model won't be affordable for many. I got a loan at .99% from DCU. I went under the assumption that others would pay 1.5%. It's too soon to see about tires and other maintenance items, so I left them out, assumed tires would be similar, and routine oil changes would be gone, etc. But I made that a footnote instead of part of the calculations. I also did a "what if" assuming that there would be state and federal rebates of $10K, and also did the analysis without it. I figured on $75/week for gas, which is near what I pay, compared to using a nearby Tesla charger or plugging in at work for free. Not everybody would be in that situation, but it's my hypothetical and I figure that those looking for a cheap car would be likely to seek out free charging if possible. Around here, it's increasingly common for employers to give a place to plug in, and if not, the power company gives lower rates. I've had somebody who charges at home tell me his overall electric bill is lower with the discount than without the Tesla. A lighter car with a newer battery has some unknowns that I didn't factor in, but it might be even cheaper to run.
Then I came up with a monthly payment for a four year loan. I took the payment and subtracted $300, which would have to be the payment size for somebody who wants about the same monthly overall expense. With the amount of money left over, it would let a person get an $11,500 car, roughly, with the rebate factored in. I don't have the exact numbers but it's easy to plug into something. Without rebates, I think it compared to a $21,000 car. So my question wasn't how a person could afford a Model III, but how a person could afford not to have one.
Yes, the numbers were very rough, but give a rough idea of where things might stand. It could turn out that my numbers are wrong because maintenance cost way less. Interest rates might be lower than what I used. Electricity might be lower and a person might even make money on the deal if you factor in a drop in a utility bill. If you throw in a few vacations with charging stations along the way, that's more savings. Then it might compare favorably to getting one vs keeping an existing car. Even if you go the other way, assume no rebates, have a marginal cost for electricity, and a big gasoline savings, you still end up with an affordable car. You also have to factor in the fact that once the loan is paid off, the monthly savings are still there for gasoline. If a person keeps a Model III for eight years, it might be as cheap as getting an ICE vehicle for free.
So once the Model III comes out, there will be a risk of all cars looking the same if everybody buys one. Other car companies are in no hurry to build EVs and I don't see them trying to catch up any time soon. So I don't see a lot of competition on the horizon.
Of course my optimistic case isn't likely to be realistic, but at the other end, it might be realistic to expect a reasonable savings compared to keeping a $20,000 car for eight years.
