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Why Tesla sells so well in places like Norway and Hong Kong

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1) Hong Kong and Norway have the highest gasoline prices in the world
2) Despite having high gasoline costs, they both have normal electricity prices by global standards
3) High GDP per capita
4) Effectively high incentives to purchase electric cars (HK has zero FRT and low liscence fee while in Norway, you get tax deductions and don't need to pay tolls etc)

You will see from my attached table, I tried to estimate the annual savings of using an Electric Car versus using Gasoline assuming 15,000km per year, 12.5l/100km fuel consumption and 220w/km.

You can see that although Tesla is selling mostly in the USA, the USA has one of the weakest paybacks given how low gasoline prices are. Clearly European countries such as the UK and Western Europe would be extremely attractive markets. They really should start investing in superchargers there big time!
 

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You can see that although Tesla is selling mostly in the USA, the USA has one of the weakest paybacks given how low gasoline prices are. Clearly European countries such as the UK and Western Europe would be extremely attractive markets. They really should start investing in superchargers there big time!

After listened to the Freakonimics radio show, I come to believe Tesla buyers in USA is not motivated solely by monetary saving. According to the radio show, the "Prius" effect dominates the green cars buying behavior, i.e.: people wants to be seen driving a Prius, kind of like a status symbol, more than any other reason. Kind of like women wearing diamonds, to show more than anything else.
For detail, you can listen to Freakonimics radio show podcast titled "Hey Baby, Is That a Prius You’re Driving?".

- - - Updated - - -

You can listen to the podcast on this web site:
http://freakonomics.com/2011/07/07/hey-baby-is-that-a-prius-you%E2%80%99re-driving/
 
Denmark should be much higher on the list, and Sweden lower. Here is why:

Both countries have 25% sales tax, and both countries applies this to cars, including EVs.

But in Sweden, there is no other tax on normal cars, just that 25%

In Denmark, however, there are also other "registration taxes", similar to HK FRT, so the difference between a Tesla Model S and a similar sized/quality car has about the same difference in "FRT" as they do in Hong Kong, possibly even more.

So while the cost in Denmark and Sweden is similar for owning a Tesla Model S, the cost of owning a similar ICE car is much lower in Sweden, making the savings marginal. If you look at sales for the Model S, I think they will show it as

1) Norway
2) Denmark
3) Sweden

and this despite the population is opposite ranked (Sweden most, Norway least).

Norway has by far the highest EV per ICE fraction, and EV per citizen, of any country or state. I think they passed 50,000 EVs a while ago, and a lot of those are Model S :)
 
I know a lot of us buy Tesla in the US not for the purpose of saving gas, but for the performance and also the unique technical designs.

With that said, gas prices in California have risen as much as 50% in the past week alone. There are too much price manipulation by oil companies, which also reinforces our purchase decision.
 
I think you also have to factor in how far people drive.

Some rough calculations I did:

Four years of ownership of a Roadster.
40km round trip drive a day, every weekday, commute to and from work. Works out about 11,000km a year, or 44,000km over the four years.
Roadster replaced a Prius, which used about 5.3l/100km.
So, Prius would have burned through 2,332litres of petrol, @HK$15/litre (including tax), that would have been HK$34,980.
Roadster cost of fuel is about 1/4 that of the Prius. So, assume HK$8,745 in electricity for the roadster.

Difference is HK$26,235 in fuel savings over four years.

And that is on a HK$1million+ car.

Numbers are rough, and don't include free public charging (although at 13A there is precious little of that). But, even if fuel for the electric car was 100% free, it would still only be HK$34,980 over four years. Perhaps if I'd used a gas guzzler, rather than a Prius, then HK$70,000 over four years?

The only way to make these numbers work is to drive more.

Bottom line is that if you drive a lot, and buy a cheap EV, then the savings can work out to be significant. I know of one Leaf owners who drives NT -> Central every day, and charges at work for free - over 5 years he is gonna do very well out of it. But, in Hong Kong, for most private car owners, that is not the reality.
 
Good review. Though, I wonder if the Prius effect is still out there. I know of a lot of loyalty to Prius exists. Even if a PiHV vehicle like a Chevy Volt or Ford Energi model is available, owners of Prius tend to continue to upgrade. Many are on their 3rd Prius. However, I look at it like this. Buying a Prius sends money almost entirely out of the country. While buying a domestic built Chevy or Ford does maintain some or most of the money within the economy of the USA. Prius are still all built in Japan and fully imported to the USA. I don't think people look at it that way here - saving money on gas is more important than where their money goes economically. If they could buy a 40mpg domestic car for $18K or a 50mpg Prius for $24K, they go Prius to save money and/or gas. The gas savings is slight and the money saved on fuel is negated by the higher price of the Prius.
 
Thanks guys. I am fully aware that people don't buy a Model S based on these savings. The broader point is that when Tesla starts selling cars at lower price points (Model 3), these issues are important to keep in mind.

I think Tesla's battery cost is around US$230/kWh. Based on the work I have done (I am doing a study on solar energy and storage costs) the cost is likely to fall to below US$100/kwh in the next 5-6 years. A mass market vehicle with a battery of 50-60kwh will have a battery cost of US$5-6k. You eliminate the cost of ICE and drive train, the premium may only be a few thousand dollars....with the savings equating to a payback of a few years which would see EVs going mainstream globally.
 
A lot of posts about "EVs are bad" or "This car/battery/technology is killing Tesla" are either from people speculating in TSLA (and other stock), or fossil fuel/ICE car industry lobbying, corruption and even paid "activists" to try to make EVs and renewable energy in general to look bad. A lot of money and power is involved here.

I mainly bought the car because 1) it is fully electric and 2) Has a very good range

If there was a smaller and cheaper EV with a similar range, I probably could not have spend so much money on a car. In other words, had the Model III and Model S/X been out at the same time, I would have gotten the Model III for sure. Maybe a higher end model with better specs and range.

Like other new technologies, early movers pay a much higher cost.

Remember when mobile phones came out in the early 90s? It was even before that, but by 1990 and forward, it really started moving. 10 hours standby time on a phone weighing almost a pound, only capable of calling and 160 character SMS messages, they cost the same as a top notch smart phone of today.

If it wasn't for the early movers, we would still live in caves, carry clubs and men would drag women by the hair.

EVs WILL become cheaper, and those persons, companies and states that help bring it on are essential. The others will eventually follow.

Most people in the developed world today have a mobile phone, while 25 years ago, only a minority did. It will go the same way for EVs, though I hope the transition will be much faster.

A great thank you to all of those that help promote EVs and a better environment, and a big BOOOO! to all those that try to oppose it.
 
Thanks in part to Tesla speeding up the process, the EV revolution is coming and it will surprise everyone at the speed at which it happens.

There are number of factors:

1) Battery costs have been falling at a rate of 14-15%pa and are likely to be <$100/kwh. Tesla's cost today is what people thought it would be by 2020 which is not that long ago.

2) Charging times are likely to be faster too. Interesting to note that many of Tesla's new superchargers have liquid cooling (so as to reduce the diameter of the cable). It is thought that this could pave the way to double the voltage in future superchargers which could effectively halve existing charging times. I can see that happening in the next 5 years. Imagine getting 200km of range in just 10 minutes.

3) Charging networks will expand like crazy. And I am not just talking about Tesla superchargers. It won't be long before you see a consortium of major traditional auto manufacturers agreeing on a charging standard and setting up a JV to roll out these chargers that have similar recharging speeds as Tesla Superchargers. The JV may charge for the electricity of course.

4) As the battery costs fall, expect more and more buses and trucks to be electric. Payback calculations are even better for larger and heavier vehicles that traditionally use a lot of fuel. Because buses have pre-determined routes, its easy to established a charging infrastructure for them.

5) This is all assuming the current status quo on battery technology. Researchers globally are hard at work on Lithium Air, Lithium Sulphur etc. A step change in technology from this point would truly make combustion engines a thing of the past. The market for batteries will explode also for industrial applications as they are now more economic than peaker plants for utilities. There would be a massive payoff for any firm that patents a technology that revolutionizes batteries.

I see the biggest challenge is within buildling batteries. Tesla's gigafactory will have a capacity larger than the total global capacity of lithium iron batteries combined and will cost US$5bln. That factory is ONLY enough to supply 500,000 Teslas. In the year 2025, the global market for vehicles is 100m units a year. If you assume that one day, EVs would have 20% of the market, you would need 40 gigafactories! Which would require approximately US$200bln in capital to build. It would take some time for accountants and financiers to approve and finance that kind of capital investment. This is one of the biggest reasons why the traditional Auto industry has resisted EVs as they are afraid of investing huge chunks of capital on a technology which is at risk of becoming obsolete. Also, Mbenz, BMW, VW etc see their technologies in gearboxes, engines etc as their key elements of competitiveness. As they move to EVs, the key area of competitiveness lies within the chemistry of a battery - something they have no expertise in. In other words, they would effectively sell a shell on a platform whose intellectual property belongs to someone else.
 
Thanks in part to Tesla speeding up the process, the EV revolution is coming and it will surprise everyone at the speed at which it happens.

There are number of factors:

1) Battery costs have been falling at a rate of 14-15%pa and are likely to be <$100/kwh. Tesla's cost today is what people thought it would be by 2020 which is not that long ago.

2) Charging times are likely to be faster too. Interesting to note that many of Tesla's new superchargers have liquid cooling (so as to reduce the diameter of the cable). It is thought that this could pave the way to double the voltage in future superchargers which could effectively halve existing charging times. I can see that happening in the next 5 years. Imagine getting 200km of range in just 10 minutes.

3) Charging networks will expand like crazy. And I am not just talking about Tesla superchargers. It won't be long before you see a consortium of major traditional auto manufacturers agreeing on a charging standard and setting up a JV to roll out these chargers that have similar recharging speeds as Tesla Superchargers. The JV may charge for the electricity of course.

4) As the battery costs fall, expect more and more buses and trucks to be electric. Payback calculations are even better for larger and heavier vehicles that traditionally use a lot of fuel. Because buses have pre-determined routes, its easy to established a charging infrastructure for them.

5) This is all assuming the current status quo on battery technology. Researchers globally are hard at work on Lithium Air, Lithium Sulphur etc. A step change in technology from this point would truly make combustion engines a thing of the past. The market for batteries will explode also for industrial applications as they are now more economic than peaker plants for utilities. There would be a massive payoff for any firm that patents a technology that revolutionizes batteries.

I see the biggest challenge is within buildling batteries. Tesla's gigafactory will have a capacity larger than the total global capacity of lithium iron batteries combined and will cost US$5bln. That factory is ONLY enough to supply 500,000 Teslas. In the year 2025, the global market for vehicles is 100m units a year. If you assume that one day, EVs would have 20% of the market, you would need 40 gigafactories! Which would require approximately US$200bln in capital to build. It would take some time for accountants and financiers to approve and finance that kind of capital investment. This is one of the biggest reasons why the traditional Auto industry has resisted EVs as they are afraid of investing huge chunks of capital on a technology which is at risk of becoming obsolete. Also, Mbenz, BMW, VW etc see their technologies in gearboxes, engines etc as their key elements of competitiveness. As they move to EVs, the key area of competitiveness lies within the chemistry of a battery - something they have no expertise in. In other words, they would effectively sell a shell on a platform whose intellectual property belongs to someone else.

Batteries are only interim. Hydrogen cars are coming, then garbage .... remember the movies Back to the Future?
 
Why I choose Tesla Model S. Simple, it's probably the cheapest car in Hong Kong that can do 0-60mph in 3.1s. It's probably the cheapest car to maintain. An ICE no matter how good you keep it's exterior or interior mint and tidy. If the engine gets old, you can't change an engine easily at low cost (in Hong Kong) and the most economy way is to sent it to junkyard and get a new car. But if your Tesla battery is getting old, just buy a new battery, then you have a new car. Roadster just got an battery upgrade option. Imagine after 8 - 10 years. You got a new battery, it last another 10 years!
 
Why I choose Tesla Model S. Simple, it's probably the cheapest car in Hong Kong that can do 0-60mph in 3.1s. It's probably the cheapest car to maintain. An ICE no matter how good you keep it's exterior or interior mint and tidy. If the engine gets old, you can't change an engine easily at low cost (in Hong Kong) and the most economy way is to sent it to junkyard and get a new car. But if your Tesla battery is getting old, just buy a new battery, then you have a new car. Roadster just got an battery upgrade option. Imagine after 8 - 10 years. You got a new battery, it last another 10 years!
Luckily, Tesla seems inclined to sell you a new battery pack for your old car. I doubt traditional car makers will be inclined to do it. They will likely follow their old ways and force you to buy a new car to get any new capability.

Now that I re-read what I just wrote, it sounds like I'm saying they won't sell you the same old-spec battery pack. Of course they will do that. Tesla however, just announced a 90kWh battery for the Model S that uses a slightly improved cell and the ability for owners to upgrade to that battery.