With A Longer Range But Much Higher Price, Can A Tesla Ever Be A Wise Choice Financially?

Now, I have to admit I am not up on Tesla S degradation rates and why should I?  Even if they lost 25% capacity in 5 years, they would still have over 200 miles of range anyway which means Tesla Degradation would rank about next to last on my "to worry about" list.  Besides, if you can afford to buy a Tesla, a few grand here or there wouldn't make a difference anyway right?...or would it?

The Roadster has been out the longest and Tesla recently announced replacement packs for them for a mere $29,000 (which is more than my LEAF was btw...) and they claim the high price is their cost and its primarily due to the higher costs of the "hand built" nature of the car and some of the more active ones should be well over 100,000 miles by now and no matter how well the batteries are treated, they will fade so lets crunch some numbers.

Before we get started, I have to say that normally I let rich people "be rich" and ignore them for the most part.  I am almost as far as you can get from that level so my mindset is completely different. Shania Twain once said in an interview that even when she had more money than she could possibly spend, she still found it hard to spend it lavishly especially on herself. She found it easy to buy gifts for others but her lifelong thrifty habits were simply not that easy to overcome.  I find myself doing the same things. I don't have cable TV but not because I can't afford it. I simply feel its value doesn't come near its monthly subscription costs.

But my interests in long term viability of a Tesla started because I met a couple who is thinking of spending a significant part of their savings to get one. They are retired so probably in their 60's or 70's and I immediately began to wonder if they were making a mistake or (more likely) jumping the gun.

We all know that Tesla offers a ton besides the sensibility of EV driving. They are 2nd to none in cool and that only gets more attractive every week it seems as Tesla continuously rolls out new updates. After all, with a 17" touchscreen, there has to be something to keep your interest!

So here we go. Right now, gas prices makes these types of calculations nearly impossible.  Gas is cheap and has sustainably so for the longest period that I can remember. I paid $2.09 for gas a few weeks ago. Since getting my Corolla a few weeks short of two years ago, the price of gas has varied nearly 100% ($3.919 on June 14th, 2014 to $1.939 on February 3rd, 2015) so its really anyone's guess as to what we will be paying two years from now.   I feel like it will go up but then again, EVs are gaining momentum and when the 2nd Gen's with their 200 mile ranges come out, I think EV adoption will explode. All this will encourage gas prices to stay low.  But then again, we are talking about gasoline and Big Oil and they rarely if ever make sense.

But if gas were to average say $2.50 a gallon for the next 5 years and we are tracking a 20 mpg vehicle at 15,000 miles a year our gas bill would run about $1875.  To make it fair, if using a LEAF to compare we should use mileage from a car that is similar like say 30 mpg or $1250 a year.   Now during my nearly 5 years of LEAFing, I have averaged between 1.8 and 2.2 cents per mile. A Tesla being bigger is probably going to average 3 cents a mile.  I am using electricity rates that currently run about 9 cents per kwh.   Since this couple lives in WA (their rates are actually a bit lower than mine but guessing they will not drive as efficiently so I its probably a wash) I will use my performance over my last 15,000 miles (this includes public charging fees btw) which ran me $310.64.  Ah....lets make it an even $350 for a LEAF,  $450 for a Tesla (at the 3 cents per mile figure)

But WAIT!! you say.  "What about Superchargers?"  Well I say, they might be convenient for cross country travel but they are not convenient for people in my neighborhood who rarely drive outside the Puget Sound Region.  We do have them but the one in Centralia is 30 miles South which is generally not the direction of travel for me or them. And the other is in Burlington which is pretty much about 75 miles farther than where we mostly go (Seattle...)  so the stops to either location would be pretty limited.  Plus we can't lose sight of the fact that any scenario predicting the future has to have a lot of things left out, right?

But say you had a Tesla Sportster back in 09 and were now pushing 120,000 miles, you could probably safely say you have saved $11,200 in fuel alone (not to mention the $$$ in entertainment value from just driving the car!)  But then again, this would be looking backwards, not predicting the future so a quick glance tells us that even 2009, gas prices were 25 cent a gallon higher than our $2.50 mark. in fact; using average gas prices, we vary from an estimated cost of  $1725 in 2015 to as much as $2587 in 2012. Add in two gas tax increases for the State (this makes us #2 in the tax race!) over the next year and that makes for a pretty wide range.   So you could probably say you saved closer to $15,000 in fuel costs alone.   One thing that is very clear here; for high performance cars, the Roadster was a bargain so $29,000 for a replacement pack makes financial sense well below 100,000 miles when the high maintenance costs of high performance gasoline cars is considered.

But say we drove a LEAF instead. On this I think I can speak with much more confidence.  Forgetting the much lower sticker price (lets say the S bells and whistles "kinda" evens that out...)  so what is our cost to drive when a future $5500 pack replacement is in our future?

First of all, with a much more limited range, any degradation will have a cost of convenience that must be considered. Unlike the Tesla which can realistically lose 25% of its range without too much inconvenience, my 90 mile LEAF is a completely different story.  Now I have never gotten that much degradation so I can only extrapolate my expected degradation levels.  Using Sloaty Degradation Model it would take me roughly 105,000 miles to get to a 25% loss.  That would lower my usable range to 67-70 miles. (If I had to, I would drive slower to prevent stops for charging most of the time)

So 105,000 miles of driving is 7 years of savings at $900 a year or $6300 which pretty much makes a $5500 replacement cost a no brainer and again that is fuel only using what is likely an unrealistic price of $2.50 for gas.

BUT

its that 70 miles of range we need to deal with. Now, I am ok with some compromises, charging on the road or driving a bit slower and colder to make sure I can make it but others? Not so much.

BUT

You have options!!

Ok, its a GOM but still pretty nice to see an estimated 123 miles of range WITHOUT a full charge!! Later it was determined that this brand new SL with a 30 kwh pack had 356 GIDs!!

Ya, the times they are a changing!!