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Can You Really Get A Tesla Model S For Under 500 Dollars Per Month?
- jamesaguilar 14y agoHeh, the part where they factor in the time you save on pumping gas is really pushing the envelope a little on "savings."
- MRSallee 14y agoEspecially considering the time it takes to charge the car. If you can do all charging while you're sleeping, then no biggie, but if you have to charge in the middle of your business trip to Los Angeles you can +$200 to your monthly tab, by Tesla's logic.
- droithomme 14y agoGood point - the time stuck waiting for the car to charge the car if driving normally is not accounted for yet is far more than 1 hr a month if one is driving the 15,000 miles a year which they assume in the same alleged savings scenario.
- dalke 14y agoI agree. They should also have factored in the time it takes to plug/unplug the charger over the month.
- ultimoo 14y agoTrue. It also doesn't factor in the fact that one may have the drive to work only for a certain number of hours per day. Let's say this number is 8 hours. One will work for 8 hours no matter what. Just because you saved 15 minutes, doesn't mean you will work extra for those 15 minutes. I am sure there is a name for this kind of a fallacy in this purportedly logical argument.
- smallegan 14y agoWhile I agree that you are right and most people work a set numbers of hours I find that it is always important to have a value associated with your time and when you set out to do something just take a second and think about the opportunity cost of said activity.
- hyperbovine 14y agoFifteen minutes a week equals an hour a month, which probably has an opportunity cost of ~$100 for the average potential Model S owner. That's 20% of what your monthly payment under this new financing, which is not trivial.
- twoodfin 14y agoWho takes 15 minutes to fill their car?
- pc86 14y agoIt's assuming you make a separate trip to fuel your car (it mentions time to drive to the station, fill and return home). It's an idiotic assumption. Changing it to five minutes (or less if you just top your car off at 1/2 or 3/4 tank) is much more realistic.
- hyperbovine 14y agoI use that number advisedly. In LA (TSLAs biggest market, really) it really is more like 15 minutes. And think carefully before you employ the word "idiotic"--it does not reflect well upon you.
- twoodfin 14y agoHow does that work? Google Maps suggests that LA has a gas station at least every other block, which jibes with my memory of the place. Are the lines really 10 minutes long?
- droithomme 14y agoIt also assumes you will drive 15,000 miles a year, then in a separate area notes you pay a 25 cent a mile penalty for all miles driven over 36k before trade in at 3 years or beyond. It also assumes that gas costs $5 a gallon in the same area that electricity costs 11 cents a kWh. Which city is this again?
- kbrosnan 14y agoFairly close to Palo Alto, CA. According to a sample bill the rate was around 12c [1]. Premium gas is currently $4.25-$4.50 it has been higher in the past. [1] http://www.cityofpaloalto.org/civicax/filebank/documents/30586 http://www.cityofpaloalto.org/civicax/filebank/documents/305... [warning pdf]
- droithomme 14y agohttp://www.sanjosegasprices.com/Palo_Alto/index.aspx http://www.sanjosegasprices.com/Palo_Alto/index.aspx Arco, 699 San Antonio Rd & Middlefield Rd, $3.93 as of 15 minutes ago. http://www.cityofpaloalto.org/civicax/filebank/documents/8089 http://www.cityofpaloalto.org/civicax/filebank/documents/808... 9, 13 or 17 cents a kWh for residential, depending on usage tier. Or if you want green energy in Palo Alto it's 11, 15 and 19 cents a kwH. http://www.cityofpaloalto.org/civicax/filebank/documents/8090 http://www.cityofpaloalto.org/civicax/filebank/documents/809... If it's a business meter, such as one would have at a refueling station, or recharging at work or at the store, it's 15 cents a kwH for green energy: http://www.cityofpaloalto.org/civicax/filebank/documents/8099 http://www.cityofpaloalto.org/civicax/filebank/documents/809... And 14 cents for non-green: http://www.cityofpaloalto.org/civicax/filebank/documents/8098 http://www.cityofpaloalto.org/civicax/filebank/documents/809...
- dwild 14y agoHere in Quebec the gas cost about 1.35$/L (which is about 5.10$/gallon) and the electricity cost 5.41 cents/kWh (for the first 30 kWh and then it's 7.78 cents). However I think the EV Incentive is only 8000$.
- parfe 14y agoWhen considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-range Model S drops to less than $500 per month. Where did business insider get what seems like a direct quote? You certainly can get the cost to lower than $500/mo if your life has a specific niche the Tesla can fill, based on the calculator. The electric car is just like minivans, pickup trucks, and motorcycles. Each has benefits and downsides which fit well in certain lifestyles, and not with others. I would certainly benefit 15 minutes a week using a home charger instead of a gas station, but the opportunity cost for me is certainly not $100/hr.
- makomk 14y agoThat quote's from the Tesla press release. You can find a link and more discussion in the HN thread for that press release: https://news.ycombinator.com/item?id=5482010 https://news.ycombinator.com/item?id=5482010
- parfe 14y agoThanks. Didn't see the other article and BI's link on this story goes to the calculator and not the press release.
- trashcan 14y agoOff-topic, but the cost of owning a motorcycle is not much lower than a car (generally). They have much higher maintenance costs in general which offsets great gas mileage, even in the smallest motorcycles. I can't find the comparison spreadsheet, but here are some of the costs - http://faq.ninja250.org/wiki/Motorcycle_TCO http://faq.ninja250.org/wiki/Motorcycle_TCO
- chrisgoodrich 14y agoThis calculator is crap. Expect to shell over the full price of the car in cash or pay $1k per month. Aside from gas, the remainder of the "savings" are BS attempts to get the "effective monthly payment" as low as possible.
- jamesaguilar 14y agoI think it's fair to count the tax credits too, at least the state one. Although many people considering it are probably hitting the AMT . . .
- chris-allnutt 14y agoThe calculator automatically includes "business" write off, take that away and you're at the 700+ mark. This is just smoke and mirrors.
- toomuchtodo 14y agoI'm paying $580/month for a 48 month loan on an Infiniti G37S, plus about $300/month in fuel. That's almost $900/month. I can charge a Model S for between 1-3 cents/KwH (time of day metering between midnight and 5am). Oil changes? Gone. Brakes? Probably every 100K miles like a Prius/Camry Hybrid. So, goodbye fuel and goodbye most maintenance costs. Sounds like a deal to me.
- tokenadult 14y agoMaybe the employees of Tesla can drive a Tesla Model S for "business," but I doubt that that is the general treatment of buying an expensive car by the Internal Revenue Service. AFTER EDIT: I should bring over here part of my comment in the other big Tesla Model S thread today. It's not clear that Tesla can genuinely manufacture its cars at a profit. http://247wallst.com/2013/04/01/teslas-awful-sales-news/ http://247wallst.com/2013/04/01/teslas-awful-sales-news/ That results in the "ridiculous numbers" of its lease plan described in the article submitted here. ONE MORE EDIT: bradleyland's nuanced reply below https://news.ycombinator.com/item?id=5483759 https://news.ycombinator.com/item?id=5483759 is what I had in mind when I indicated that Tesla is probably blowing smoke about business deductibility of their car. That depends on business use, which is a fact-based inquiry.
- niggler 14y agoThe trick is to get a $1 lease (where the terminal price to buy the car back is $1) and buy it with your personal dollar (incidentally, the local ferrari dealer showed how to set this up, and it is apparently a common practice) Also, to clarify, "expensive car" for the IRS and most states is >$250K and none of the Tesla cars are that expensive.
- nvr219 14y agoCan you explain the lease trick?
- niggler 14y agoI AM NOT A CPA so please please please please please talk with your accountant or tax advisor. Rules are explained in publication 463 "Travel, Entertainment, Gift, and Car Expenses". There's probably a PDF on the IRS site.
- bradleyland 14y agoBefore I say anything, please understand that I'm not an accountant. However, my sister is, and she does my taxes. I'm a curious type, so I ask a lot of questions, and she doesn't mind. The trouble is that this stuff is very nuanced, so I often get the details wrong. I'm going to try and explain (in broad terms) why niggler's suggestion pushes the boundaries, based on my understanding. First, there is no trick. There used to be a tax benefit to leasing in that you could depreciate 100% of the lease expense immediately, just like any other business expense. Unfortunately, the IRS has changed the way they treat automobile leases, and you now have to depreciate them on a schedule like you would any other asset. Prior to the change in this rule, and assuming that you were able to write off a Ferrari as a business expense, structuring a lease with a $1 residual would mean that nearly the full value of the car would be paid as lease payments. This meant you could depreciate the payments immediately, receiving immediate tax benefit. I'm not sure what niggler was talking about with the >$250k, but I suspect he's talking about the limits imposed on business deductions. There's a ceiling to the amount of business expenses you can deduct before you have to start using depreciation schedules. IIRC, that ceiling is around $250k, but I'm fuzzy on this one. All I know is that my little consultancy never hit a big enough number that I had to worry about it. I took everything as a straight business expense, including 50% of my lease payment for my car. Here's where things get shady though. Writing off a Ferrari as a business expense is a high-risk proposition. The IRS has very specific rules about automobile deductions. You have to be able to substantiate the business use of the automobile. If you can't, or if the IRS strongly disagrees with you, they can stick you with the back tax. If you've got the kind of money laying around that allows you to lease a Ferrari with a $1 residual, then you probably have the money to pay lawyers to fend off IRS auditors too. For your average person, it's not worth the risk, IMO. If you have a justifiable business use for your car, and you're comfortable keeping mileage logs that explain the business purpose, then go for it.
- orangethirty 14y agoPuts 4-square sales form on the desk. So tell me, what kind of payment did you have in mind? $500/month? That sounds doable. Do you have anything down? No? That's fine. I can still get you a good deal, though it will take a couple of extra payments to cover that. What's some extra payments here and there? You are still basically paying the down payment as a monthly payment. So it works out for you. Ok, great. What color were you looking for? Blue? Sure, we have that. Though the blue comes with the optional supercharger package. Yeah, Tesla only sells the blue model with that package. Uh-huh. It's basically an extra $13 a month? I mean, that's nothing for the convenience of the supercharger. You are already saving thousands of dollars in gas by buying an electric car. An extra $13 a month is no big deal. Ok, so let me run this by finance, and we will have an answer in five minutes. Let me show you the car a bit more while we get a response. Please follow me to the lot...
- meritt 14y agoI hate you so much right now. Well done.
- wavesounds 14y agoDid I miss it or does this article not mention the gas savings? You can charge this car for free at Tesla's superchargers or cheap at home, with gas at over $4 a gallon thats a huge savings, theres people who easily spend $300 a month on gas, thats probably going to be the biggest part of the savings for most people, this article should have at least mentioned that. edit: US average is $368 per month: http://money.cnn.com/2011/05/05/news/economy/gas_prices_income_spending/index.htm http://money.cnn.com/2011/05/05/news/economy/gas_prices_inco...
- codex 14y agoThat's the household cost, not the per-car cost. Most households have more than one car.
- wavesounds 14y agoYou're right I should have mentioned that. But It gets complicated because a family would probably use this car for their longest trips/commutes, would use this one more then their secondary car for elective trips. Also this is grouping in single person households with coupled households and its including people who dont drive to work and the states containing the most people who would buy this car are also the states with higher than average gas prices as well. I haven't been able to find the statistic on how much an average Californian who drives to work spends but I think its on the order of hundreds of dollars in savings per month, which this article doesn't mention.
- droithomme 14y agoIf US average spending on gas is $368 per person per month, that's 100 gallons of gas per month, or 1200 gallons a year. Typical car these days gets 30 mpg, so that's 36,000 miles a year. Even if driving a gas guzzling SUV that gets only 19mpg, that's 22,800 miles a year. Yet according to the US DOT Federal Highway Administration, the average annual miles driven is 12,334 per year. So the $368 that CNN claims is a lie. Except it was per two adult/two car household, and taken at a point in 2011 when gas prices were at $3.98 a gallon. Here's more recent numbers. http://dailycaller.com/2013/02/05/report-u-s-households-spend-record-amount-on-gas-in-2012/ http://dailycaller.com/2013/02/05/report-u-s-households-spen... "The Energy Information Administration reported that the average household spent $2,912 on gasoline in 2012." Note that the 2012 number is a secondary high record (2008 held the record), and uses the actual final numbers for the full year, rather than a CNN number that cherry picked a momentary peak and extrapolated to the whole year and then never published a follow through with the actual numbers. Typical CNN! Not reliable to cite. Anyway that's around $1500 a year per adult/car, or a bit over $100 a month. $1500 buys 408 gallons of gas, which gets you 12,240 miles at 30 mpg. Now these numbers make sense because they match what we actually know about how far people drive.
- droithomme 14y agoThe part where the government gives $15,000 to pay for a luxury car for ultra-rich white folks is what irritates me the most of this scam. $15,000 would buy outright a decent car with good mileage for someone poor but responsible who couldn't get to work otherwise.
- richardjordan 14y agoOr public transport. $15,000 per individual pays for a lot of public transport.
- djt 14y agocouple of thoughts: - Could be to reduce reliance on fossil fuels - Its more of a way to create jobs in America (ie car would worth less profit otherwise) - a manufacturing base is important for certain things (ie can be used for military in times of war) - lowers unemployment (looks good on stats) Not that your point isnt valid as well, I imagine that they see it as a welfare solution on the bottom end.
- eikenberry 14y agoWhere did it say that the deal was only for white folks? I missed that.
- x3c 14y agoWhat is the racial distribution for top x% who can afford Tesla? I missed that.
- richardw 14y agoIf it makes electric cars more desirable and encourages research and competition, everyone will benefit as the technologies trickle down. The EV industry has needed a kick-start and the US auto industry should be energized by this rather than just racing to the bottom against foreign carmakers. More US jobs. As a foreigner, I won't be able to afford an EV for along time but I think this makes it more likely I'll get it sooner, due to the technologies proliferating.
- smackfu 14y agoSubtracting off the cost of gas is pretty shady. * Gas car costs financing + gas each month. * Tesla costs financing each month. * Tesla does not cost financing - gas each month!