Assume you look at a 10 year ownership period with 15,000 miles per year. You can wiggle those numbers around as you see fit, but for the sake of averages and easy computing, I think it'll be in the ballpark for many. In our case, the ownership period will be much longer (our humble Chrysler is already 15 years' age and still going strong and our Tesla mileage is actually running a little higher because we use it every opportunity we can).
Note that I don't really take into account depreciation per se-- since we really don't resell our cars or trade them in-- but rather I'll simply pose the question of "what do you have left at the end of that period?" for each car. Also note that buying a Certified Pre-Owned (CPO) Tesla can dramatically sway that equation. I recently saw a 60kwh Model S was sold for $44,000. Wow!
Pick a $40k-ish car like a top-line Ford Taurus, Chrysler 300C or Chevy Impala to get close in size to the Model S. No stripped out base models-- how could that be a fair comparison to the tech of Autopilot, AWD and the world's best production battery pack?? We're also not talking performance benchmarks like an Audi S7 or a Porsche Panamera (there's no question a Tesla is better value long-term compared to those when premium fuel costs and maintenance are factored in, as you'll see using the math below). And do check all those links (where I have them) so you can see I'm not just fabricating evidence like some people (hey, it's campaign season... apply to whichever candidate you want to).
We're figuring on 150,000 miles during that ten years with an average (realistically-- not fantasy EPA numbers that don't account for hills, cold weather, running late to work, traffic filled commutes, etc) fuel economy number of around 20 mpg, overall (which is what the EPA rates the AWD version of the Taurus, coincidentally). Likewise gas prices are unpredictable but I'm going to use the national average from 2014, which was $3.34/gallon for the whole year (and figure premium if you're comparing a car that requires more than regular octane). You can recalculate using the 2015 average when it becomes available-- but remember that electric prices will always be more stable than gas and, more importantly, you may have some ability to generate your own electric (through solar panels) but no ability to make your own home-brew gasoline. Residential solar is still pretty costly for most people, but I hope the equation hits a tipping point when production/efficiency curves get a little better-- which could happen soon. But I digress, the point is the potential is there. Try that with gas.
Your gas costs over 10 years then equal $25,050 (150k / 20 x 3.34). Figure another 30 oil changes at $50/each in that time for $1500 (which is every 5000 miles-- so count 50 if you go every 3000 miles), PA state inspection/emissions at $700 ($85/each, minus the $15/each I pay for the Tesla because it doesn't require the emissions portion) and we're up to $27,250 in running costs.
You'll certainly need at least one set of brakes in that time and possibly more-- costs vary WILDLY depending how DIY you are-- plus air filters, timing belt/chain, catalytic converter/exhaust system, hoses, coolant/brake fluid flushes and all the other repairs (head gaskets seem to run in my family) and maintenance on a car approaching 150,000 miles. All of that combined is going to be a significant number of some kind-- but we'll NOT count it directly because it's so variable and assume it's just the "wildcard" number of at least $5000. More for dealer work, less for a hard core DIY (like me) but even at that... I think my new head gasket and radiator on my Chrysler a few years ago was about $3000 just for those two repairs. I haven't paid for brake work in years, but generally it's somewhere around $500 per axle and many around here will do that TWICE for each end in a ten year period just because of rust and our wacky terrain. Whereas the regenerative braking of the Tesla is energy fields and not mechanical wear, so those big Brembos should last a very long time unmolested, doubling down on one of the best parts of the Tesla's driving characteristics.
So take the fuel/oil/emissions costs, the "wildcard" $5k (HA HA) repairs/maintenance and then add back in the purchase price of the car ($40k) and our total thus far is: $72,250.
The current bottom rung on the Model S is a 70kwh, rear-drive version at... drumroll.... $71,200.
That gives you about a $1000 to blow on options any way you want and still come out ahead-- use my referral code and you'll have $2000 for options (shameless plug). Factor in federal tax credits (up to $7500) and whatever your state credits are (mine is $2000) and you're really somewhere UNDER $62,000 for a brand-new Tesla.
Now consider a car of that age and mileage. It's 10 years old and has a 150,000 miles on it, with all the crumbs in the seat, the rattles, the wear... What's the life expectancy of the components you've been fortunate enough NOT to already replace? Transmission, gaskets, valves, exhaust system, body rust (here's looking at you Snow Country!), belts, hoses, etc. etc. How many used 150k+ mile cars would YOU buy? And remember-- if you DID replace those components, you should add them in on that "wildcard" number above.
That then begs the question: What is the life expectancy of a Tesla? Truthfully, no one knows. Not a clue. Lots of guesses, lots of assumptions. My car has been totally reliable so far and we know that there are some factors we can make educated guesses at.
For instance, even with the worst case battery degradation projections I've seen (1% capacity/per year) you will still have a completely usable range and your performance will be exactly as it was on DAY ONE because electrical motors don't degrade. Have you driven a 10 year gas car? It's no where near as "peppy" as when it left the dealer's lot. In hard numbers, one study says 6% battery degradation on average for the first 100k on your Tesla and the curve slows from there. So my 85kwh pack should still haul me about 245 miles on a charge after 100K miles, a very usable range.
Okay, so what if the battery is toast? What if the motor itself dies? Or the screen? Certainly we can agree that any new battery pack will be vastly cheaper and more powerful ten years from now if you want to really extend the car's service life. That's about an hour's work in a Tesla Service Center and the original battery will still have a pretty significant core value simply because of the materials inside. What's the value of a dead V-6 engine? Replacing a Tesla drivetrain is a pretty painless affair too. It's also about an hour's worth of labor and a core value that is high. I'm confident that with about 100,000 Model S on the road already, Tesla will have plenty of expertise to keep my 10 year old "classic clunker" on the road when the time comes. If the company goes belly-up, those parts are also very likely to survive most accidents that total a car, so salvage parts should be viable. Pop a new pack and a new motor in even a 20 year old Model S and it will still be rust free (it's all aluminum) and performing just as it did when new. Not much is known about the touchscreen... but I would assume it'll also improve with new versions and remain available if it fails. I can't imagine it would be any more expensive outside of warranty than any other car's various computer modules.
Having established that a base 70kwh Model S is a one-for-one swap with a spiffy Taurus and that it will have a lot more "FREE" years worth of life in it after those first 10, let's talk about where the REAL value is. Here's the bottom line question: Which car is better? Considering the difference in safety, performance, convenience (no gas station commutes/time wasted), technology, cargo space (the Tesla is a giant hatchback with a huge well under the load floor and the front truck too, after all) and-- frankly-- owner satisfaction between a Taurus and a Tesla-- or the Impala or the 300C-- there really is NO comparison. They're in completely different leagues. You really CAN'T compare a $40k "bland sedan" to a Tesla. To even get close to the Tesla's real-world benchmarks in all those areas, you really have to start looking at the stats on much pricier cars like Audi, Mercedes, BMW, Porsche, etc... and then the fuel costs/maintenance will make the Tesla's long-term value even more apparent.
Sure Matt, you say, I could get a 70kwh... but YOU have an 85kwh and what if I want AWD and some other goodies on top of that? Yep, yep. I agree. If I were ordering new today, my preferred configuration adds up to $95,450, which is thousands more than what I paid "back in the day". Fact is, I'm unlikely to order new. With the launch of the CPO program, you can find great deals-- which is what we always looked for; remember, we're "cheapskates"-- on someone else's old Model S. With 85kwh versions regularly dipping into the mid $55k range, there's lots of opportunity out there at a price that just obliterates buying any gas-powered car. The only way a gas powered car can beat that price over a 10 year period is if you park it in the driveway for the first 5 years.
Then there's the crux of the matter: what does Matt mean when he says the "math made perfect sense for his family"? What that means is: we all make choices in where we spend our money. When I wrote that our friends/family were dumbfounded by the purchase, I referenced our reputation for being "cheap" or frugal. Many of them misread us, not realizing we happily "overspend" when the quality of a product or experience merits the extra coin. The real value of a dollar is actually found at the price point where anything's improvement over a cheaper version starts to have diminishing returns. The cheapest tool is rarely the cheapest tool down the road. Likewise, the most expensive tool is probably overkill unless you're a professional mechanic. We don't only buy store-brand food but we do buy some. We shop at BOTH Aldi and Whole Foods. When we eat out, it's never at the best restaurant in town and it's also never at the cheapest place in town. Last year we took a couple vacations-- one was tent camping, one was 2 weeks in Europe. Don't misunderstand though, we still AGONIZED over buying a Tesla.
My point is, there are times when we all choose to spend MORE than we really have to. A smart consumer recognizes that the least amount spent is very rarely the best overall value. So we splurged a little and bought this crazy amazing car because FOR OUR FAMILY this was the perfect way to get something a little bit nicer than we really needed (panoramic roof, larger battery pack, etc.) and it has been totally worth it... But pretty much anyone shopping for a new car can surely find a Tesla of some variety that will work for them to be a better value LONG-TERM. The buy in might be higher than a gas car, but over time you will love this vehicle.
And it's American-made. And the mobile app lets you warm/cool the interior from anywhere in the world. And you can track the car remotely. And it will swallow an amazing amount of gear. And it can drive itself (if you get one with Autopilot). And.. And.. And! You can fill in your own blanks.
Oh, and the vanity plate got a lot of comments too.
Here's the thing: I made it under the registration fee increase by about a week. At the time my plate application was approved, Pennsylvania was charging $19... ONCE. Yep, you paid the fee ONE TIME and got a cool plate. For a guy like me, who refuses bumper stickers and "junk on my trunk", a vanity plate brought me a lot of smiles for not a lot of money. We really enjoy watching people point and take pictures (who knows where THOSE all end up??) at our amusing nudge. We wanted something clever and funny but non-confrontational because we still have both our old gas cars and I feel like smug or finger-pointing plates don't start helpful conversations. Note that since we got our plate, the fee has increased to $79... and though I'd probably still pay it (for the smiles it makes) I'd think a lot harder about it. Yep, I'm THAT tight with my money!
Which answers the other common question of "where did he come up with the money in the first place?" I saved it. Pennies at a time and a few careful investments.
If I've helped you make the leap to Tesla, please message me so I can answer your questions.
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