The other factor with resale is that the Model S is light years ahead of any other cars in terms of technology. So, in 5 years the current center console of the Model S will still be far superior in terms of user experience than any other car in the market IMO. This will help resale value.
Another point is that current users are experiencing very little degradation on their batteries, even after 20-30k miles of usage. After 5 years/70k miles, the battery will probably still be at 95% capacity and this will help resale as well.
Also, with EVs in general you are buying not just the car but the battery. Think of it as you're buying your future gasoline with the car purchase (of course this isn't a perfect analogy because you still need to pay for electricity), so that's why EVs tend to have fairly good resale value.
Lastly, Tesla demonstrated a battery swap (in less than a few minutes) last year (https://www.youtube.com/watch?v=H5V0vL3nnHY). They've hinted that eventually you'll be able to upgrade your pack by paying the difference in value between your used pack and the new pack. No details have come out on this as of yet.
No way. I'd say you have 75% tops (probably less with 70k miles). And unless you pre-buy a new battery you're going to be looking at a $20-30k replacement cost. Also note that it will likely be out of warranty at that point. And that Tesla values them at roughly $1 per mile (the price they give you for purchasing a loaner).
I know in the past I've thought "hey, my iPod battery lost most of its capacity after five years, I guess li-ion batteries just don't have that much longevity." What I didn't know at the time was that different types of lithium ion battery chemistries yield drastically different lifespans. Studies have also repeatedly shown that temperature makes an enormous difference to longevity, and the Model S has a pretty fancy HVAC system designed to keep the battery within an optimum temperature range as much as possible.
Again, I agree with you that it's hard to really have any idea what the resale value will be in the future. But if we're guessing blindly, I don't think it's totally unreasonable to make an optimistic guess.
I know it is a good company. I was waiting for them to revolutionize the SUV market with a true sports-utility electric vehicle. I would have been in line to buy one. Instead they are putting out a bullshit Gucci gull-wing contraption that is a total let-down. That's when I ceased to be interested in Tesla.
For a number of reasons we recently purchased a used two-year-old low-mileage BMW. For a little more money we got extended coverage that takes care of everything for seven years. We even covered the (expensive) tires.
We could have bought more than one fully-covered low-mileage certified-pre-owned BMW for the cost of a single Tesla.
My wife ran over something and punctured a tire a couple of months ago. Being a "run flat" tire, she drove to the nearest BMW dealer. They gave her a loaner car for the day and, for a $50 deductible, replaced the $500 tire and cleaned and washed her car.
So I read an article like this and my first reaction is: Who are they trying to fool?
Starting at the top end of the market and providing limited options is the Apple approach, likely to lead to profit but not necessarily market share.
What's a let-down about it? Legitimately curious.
EDIT: I should've clarified that I don't spend a WHOLE Sat for a car oil change. But for a 30min work on the car, you have to go there, wait to drop off car, listen to dealership clerk going on and on about expensive 'preventive' repair I should get (any my family friend mechanic tells me none needed), wait a few hours (because of other customers at same dealership), and get a ride back dealership to pick up the car. That's like 2-5hrs.
As for going to non-dealer mechanic, well it is hard to find a good mechanic you can really trust. And such mechanics are usually booked.
On my very 1st car last oil change, I got an oil change at a shop I hadn't gone to before, for lack of time. Later I learned the mechanic had jammed the cap to the bottom of the motor oil tank at an odd angle and had just jammed it on, destroying the thread on the tank. One more oil change and it would've meant having to replace the motor oil tank.
Shouldn't all batteries be "Netflix for tesla batteries" whereby you simply rent them?
"Tesla’s Resale Value Guarantee allows owners to sell their Model S back to Tesla between the end of months 36 and 39, regardless of the loan’s term. The resale amount is specified at the time of delivery and is forecasted to be higher than any high volume premium sedan brand (Audi, BMW, Mercedes, Jaguar or Lexus). This value is equal to 50% of the original base purchase price of the 60 kWh Model S plus 43% of the original purchase price for all of the options, including the upgrade to the 85 kWh battery pack (exclusive of taxes, fees, and accessories)."
More here http://www.teslamotors.com/financing/faq
The big annoying charge was ~ $4200 at 110k miles in 2010. The transmission failed, so this charge was for a Honda remanufactured transmission and PCM, plus the 105k maintenance (new timing belt).
The other significant charges are brakes and tires. It's almost $1k to replace the tires and brake rotors, which on this vehicle have been around every 50k miles.
SWAG at fuel costs: 170k / 20 mpg * $3 ~ $25k.
Credentials: Owner of a 2002 Honda with 210K miles on it currently.
http://en.wikipedia.org/wiki/Honda_Odyssey_(North_America)#T...
I probably won't purchase a Honda again.
Then: "The RAV4 EV, which we had just purchased, decimated the pack."
These two statements aren't compatible. Or somehow I am repeatedly misreading what he is saying.
As you were.
EDIT: Ok I now remember why I misremembered. The delta in operating cost is about 10 cents/mile. The delta in price is $18,755 (ignoring rebates, credits, etc.). So you would have to drive 187,550 miles for the Tesla to come out ahead. In other words, the TDI A7 is at a similar TCO to the Tesla, but with extended range and quick fueling.
FWIW, my lifetime actual fuel costs have $0.110/mi over almost 40,000 miles, and that's based on basiclly worst possible variables... auto transmission instead of a stick, hot climate (lots of A/C usage, which is about a 2-5mpg ding), and lots of city driving.
What is the value of not having a car that looks brand new and modern with your eyes, and sounds like a chitty-chitty-bang-bang set piece with your ears ?
I just got back from Zurich where I saw brand new MY 2014 A6 and A8 cars driving around ... with TDI ... and they sounded like props from an old railroad farce.
(full disclosure - I own a gasoline powered A8 currently, so there's no hating going on here ... except against diesel)
So Tesla stands as the most recent and the coolest of a long line of electric cars. Just as they have refined the concept of an electric automobile, the latest diesel technology that Audi is incorporating is a refined clean-buring diesel technology without the baggage of the old smokers.
So I'm not sure which retrograde technological movement you have in mind.
That depends on where you live. I've been told that my insurance rates (clean record) are high for my 2005 Odyssey because of the area I live in (I live just outside of Toronto, Canada).
Insurance costs are very localized, but for any 2 vehicles the coverage cost spread between them is probably comparable in any given region. EG: an Odyssey will always be cheaper to insure than a Model S in any specific region, BUT insuring an Odyssey in Toronto might be more expensive than insuring a Model S in Tulsa.
- What about the 'guaranteed' buyback option? I'd be afraid that a buyback will be the only option to sell your old Tesla, because they won't be re-sellable on a free market without a costly hw/sw upgrade that can be done ONLY by Tesla.
- There's no way to reduce your costs by using third party replacement parts or batteries.
- A single failure can ruin your ROI calculations because the repair costs are hard to predict.
- The market for used Teslas is limited to areas where the charging network is available
Why do you think you need to live in an area with a charging network to buy a Tesla car? Its range, equivalent to most gas cars, gives you many days of typical driving between charges. Unlike gas cars, you can "fill up" at home, there are no external dependencies. You'll also never suffer in a fuel shortage, which my area had several times before winter storms this season.
Its value/depreciation curve will look very different from a still-manufactured luxury sedan of a previous generation, which is what the Model S will be in 3-5 years when Tesla release a new style.
There's not much to service, and normally you should do it once a year. The mechanics currently don't have schematics for Model S so it probably feels better to have it fixed at the company. I would imagine that you could get brakes replaced at your local mechanic, but I can't think of anything else they could do with it.
For example Tesla doesn't even have ODB-II port for diagnostics (it was recently revealed that instead of CanBus they use Ethernet). Things like that make the car is very different and the mechanic might know less about the car than yourself.
It was recently revealed that instead of CanBus they use Ethernet
There's been speculation that UDP broadcasts from the CAN bus are carried over that network as well, but it's almost certainly used for displaying information and informing various non-essential systems.
[1]: http://www.teslamotorsclub.com/showthread.php/28185-Successf...
Tesla S85:
[year one] 93,970+8222+1170
[Tax break] -(10000/1.03)
[resale] -(30,160/(1.03^8))
[electricity and maintenance] +(600/1.03)+(1900/1.03)+(600/1.03^2)+(650/1.03^3)+(650/1.03^4)+(1300/1.03^5)+(1300/1.03^6)+(1350/1.03^7)+(1350/1.03^8)
= -78383 NPV
BMW 382d (ICE with greatest depreciation / maintenance):
[Year one] 50000+4480+1200
[Resale] -(15000/(1.03^8))
[Gas and maintenance] +(1594/1.03)+(1631/1.03^2)+(1669/1.03^3)+(1706/1.03^4)+(2288/1.03^5)+(4327/1.03^6)+(2365/1.03^7)+(2404/1.03^8)
= -59385 NPV
Did I make a mistake here?
I'm not sure how his particular usage and rates compare, but the rates for my most recent PG&E bill are as follows:
$0.13627 for the first 487.20 kWh $0.15491 for the next 146.6 kWh $0.31949 for the next 340.9 kWh and then up.
In my area, according to my bill, average household usage (for the past month) is 400kWh, and 250kWh for "efficient homes." I'd imagine average use is higher in the summer months due to air conditioning, etc, and higher in the winter months due to heating and lighting.
So, right off the bat, $0.12/kWh is low, but perhaps rates were a bit lower when he did this analysis, or he lives in an area with cheaper rates? But let's assume that he's an efficient user of electricity, and uses 250 kWh/month for things aside from the car. He estimated 15k miles per year, at 3 miles/kWh, that's 416 kWh per month, which works out to roughlly $65.50/month, or $785/year, not $600.
If we instead assume he's an average user in a home that's not "efficient", it goes way up to roughly $92/month, or about $1100/year.
Obviously I don't know this person's exact rates for electricity, or his usage, and it may be the case that there are credits associated with having an electric car that can bring his average rates down or prevent him from going into the higher tiers (as he said, he could often charge for free at work), but regardless an estimate of $0.12/kWh seems strikingly low. I'm sure there are areas of the country where that's reasonable, or even high, but I don't think the Bay Area is one of them.
Of all the cost analyses of Tesla ownership that I've seen (admittedly few), I have yet to see one that attempts to take into account the higher marginal electricity cost associated with using significantly more electricity.
Maybe he lives in Alameda?
And if it's anecdotal quality you're speaking of, try again there too.
I drive a German car, I'm not an American car apologist, but there's no question that the "big 3" have stepped-up their game.
Not to mention, all the Japanese, Korean and even some European cars you mention are actually built in the US.
I think the theory also comes from the fact that the Big 3 seem to have many more recalls than foreign companies. However in recent years, Toyota has actually recalled more cars than any other company [1]. Recalls are most often initiated by the company and not the government and therefore stats can change depending on the willingness of the company to start a recall (as seen by GMs recent problems). Anecdotally, the Asian car manufacturers rarely ever publicly announced recalls and would simply perform the recall when you took your car in for service. Therefore customers never knew there were issues and they were branded as "reliable" cars when perhaps they shouldn't have been.
1. http://articles.latimes.com/2014/feb/04/autos/la-fi-hy-toyot...
Ford seems to have really cleaned up their act the last 3-5 years. I'm still a bit wary of Dodge/Chevy/GM, but have been super impressed with Ford. Granted, Ford did stink it up something ferocious in the early-mid 2000's.
Completely anecdotal, but we bought a 2012 focus last year and have been incredibly happy with it. Far more than with the Honda Civic it replaced. We run the wheels off our cars, and it's been a real trooper. Good gas mileage, easy to work on, cheap to repair/maintain.
I love Tesla, but they are just not there yet on cost.
http://www.teslamotors.com/true-cost-of-ownershipThat being said, I love everything about Tesla and even if the car depreciates more quickly than a Mercedes or BMW, I'd still be happy with it.
So there is no point calculating the TCO of new car over more than 3 years, because if you are OK driving an old car, it's always much cheaper to buy used.