6 ms·

Under the new deal, Tesla owners should be able to get their payments down to about $580 a month just factoring in gasoline savings alone, Tesla said. Is he su

by uvdiv 13y ago

Under the new deal, Tesla owners should be able to get their payments down to about $580 a month just factoring in gasoline savings alone, Tesla said. Is he subtracting fuel savings from the car price? I recall there was an HN thread complaining about this but I can't find it... Here's the calculator. They claim an "effective cost" of $579/month (default choices), which it seems means $917/month in actual payments, plus negative $261/month in fuel savings: http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership

ricardobeat 13y ago
It makes perfect sense. You can either add the gasoline to the others or subtract from the Tesla. Ex: A Mercedes C300 might cost $420/month, but the effective price is $800/month considering fuel & maintenance. Is that also problematic? Most people will initially compare the Model S'$60k price tag vs $40k for a Mercedes, but the total ownership cost figures tell a different story.
- kirk21 13y ago
  It is weird that they don't stress the reduced maintenance costs. When something breaks down it is always extremely expensive (or they are overcharging you). Consider the life cycle of a car and there is something expensive that will break down.
  - ams6110 13y ago
    Most cars these days don't "break down." There are maintenance costs which may well be lower on the Tesla (though some new car deals include free scheduled maintenance), but bottom line, if you can afford a Tesla or another car in its price range, maintenance and gasoline are not costs that are going to be significant in your budget.
    - ricardobeat 13y ago
      Maintenance and repairs easily add 10% or more to the total ownership cost, and gasoline over 20%. $200/month adds up to almost $10k over 4 years.
- baak 13y ago
  I don't spend $261 in fuel every month. Actually, closer to $70. A friend of mine makes a road trip every week for business. Do they also add the cost of the time you spend waiting for a charge at charging stations vs a quicker gas pump for road trips? A full charge is about an hour. Should the price be higher for him? Look, I'm not saying it's still not a decent bargain when all is said and done, I'm just saying you can't roll it into your 'cost' and advertise that as the price you want me to pay. I am not paying that. I'm paying 190 bucks more a month based on my current fuel usage. My friend would be paying for it in an extra hour a week at least. These things count too.
  - ricardobeat 13y ago
    Have you been to the website? It's a calculator, you put in your mileage and other costs and it gives you the TOC. $580/month is the best case scenario. You'll see they actually do the opposite, discounting for saved time, since 90% of the time you'll just plug it in at home and never worry about recharging during the day, instead of a trip to the gas station every week. http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership
- eli 13y ago
  Adding the cost of gasoline to gas-powered car makes sense in making a buying decision. So does adding the cost of electricity to a Tesla. But subtracting the gas costs that you aren't paying from the Tesla does not make sense. The cost of owning a Tesla should not vary based on what you're comparing it to. If I decide to get a Tesla instead of bike to work does the Tesla now cost more than $900?
  - CamperBob2 13y ago
    Why not? The comparison assumes you are otherwise in the market for a gas-powered car that will cost $300/month above and beyond your car payment. Yes, if you park the car and never drive it, the gasoline-fueled vehicle will be cheaper. But that isn't a meaningful use case. I don't get the controversy...?
    - pfortuny 13y ago
      The only honest comparison is ADDING the gasoline cost to the gasoline car: otherwise you are simply LYING: because the payment is 900 whatever the gasoline costs. What it I spent 1000$ in gasoline a month? Would I get a free Tesla?
      - CamperBob2 13y ago
        But I don't understand why you wouldn't consider the cost of gasoline when considering how much it costs to own and operate a gasoline-powered car. It just doesn't make the slightest bit of sense. If your transportation budget includes $1200 a month for gasoline, then you could get another Tesla simply by giving $900/month to Tesla instead of the oil companies. (All of this assumes that the cost of electricity is free, which is of course bogus.)
gamblor956 13y ago
It's still bad math. The fuel savings are relevant only where you are directly comparing monthly costs of the Tesla to other cars. Gasoline is not a cost of the Tesla; not paying for gas doesn't change your monthly Tesla costs. You'll always pay at least $X. The fact that you're not paying $Y because you didn't buy Z is not relevant to calculating $X. It's disappointing to see that Tesla still relying on misrepresentations to sell its cars.
- jwegan 13y ago
  I think it is fair for Tesla to put that in. Many people start off car shopping by comparing monthly lease amounts for a range of cars to figure out what is in their price range. However, at this high level overview, it can be easy to forget to factor in items such as gas into the monthly cost. Tesla marketing is simply doing their job and making sure consumers don't forget to add the price of gas to gasoline cars, by making a point of subtracting it from their car.
  - psbp 13y ago
    So if I lease a gas powered car and I take a month-long vacation, will I get my money back?
    - ericd 13y ago
      Be fair, this is an uncommon scenario in the US. Even if you do this, it's amortized over the months you're not out of town.
- PakG1 13y ago
  It always seemed to me that they're comparing total cost of ownership of cars, not direct costs of purchasing cars. If it's total cost of ownership, it's an absolutely fair comparison.
  - eli 13y ago
    But gasoline has nothing to do with the total cost of ownership of a Tesla. If they wanted to have a calculator that showed you the "real cost" of a competitor's car (with gas included) vs a Tesla (with electricity included) that would be a fair comparison. If I bought a Tesla it would mostly be replacing bus trips not another car. That shouldn't have an impact on the cost of owning a Tesla.
nineteenturtles 13y ago
My biggest question is with the -$95 a month they attribute to the guaranteed resale value. I can't immediately tell how they came up with that.
- andrewtbham 13y ago
  This is a plan to effectively lease the car for 3 years (with the tax credit benefits of buying). At the end of 3 years, you will get back the $95/month, when you trade it in. (so it's the resale value minus what you still owe on the car)
  - uvdiv 13y ago
    That doesn't make sense. Other cars have resale value too, so how is this a comparative advantage? Why are they subtracting this off? Google suggests the "average" car actually has higher resale value, at the same age/mileage, than what Tesla is guaranteeing: (I guess they're comparing to a subclass of luxury car which depreciates faster) http://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html http://www.edmunds.com/car-buying/how-fast-does-my-new-car-l...
Zoepfli 13y ago
What about battery replacement cost? AFAIK, Tesla buyers are looking at a $20k line item 5-10 years down the line here. Something gasoline cars don't need. By talking about gasoline cost in their car price calculator, Tesla is going for a "total cost of ownership" thing, so why is battery replacement cost not included? It looks to me as if Tesla is eager to talk loudly about the unique costs of their competitors, while keeping quiet about the unique costs of themselves.
- jacquesm 13y ago
  That will be reflected in the resale value of the vehicle. Very few first time buyers will own a car longer than 5 years (even if that would be the most effective way of using their money). Likely the car will be traded at least once in those 5 to 10 years.
  - Zoepfli 13y ago
    Of course it might be reflected there. But Tesla is not saying anything to the line of "resale value might be lower than a comparable gasoline car because the battery will have to be replaced" either.
    - marvin 13y ago
      This is incorrect. Tesla explicitly guarantees the resale value of the leased car. http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership
      - Zoepfli 13y ago
        Interesting. But my original point stands: if you don't sell your car, you're looking at a $20k bill a few years down the line, and on the page Tesla are happy to talk about total-cost-of-ownership of their competitors, they're not telling you about that $20k replacement.
        13y ago
paul_f 13y ago
I'd be more willing to accept his apology if he didn't then drop this absurdity. How much actual money do I pay for the dang car? I have my checkbook out, what do I put in this box?

by uvdiv 13y ago

ricardobeat 13y ago

It makes perfect sense. You can either add the gasoline to the others or subtract from the Tesla. Ex: A Mercedes C300 might cost $420/month, but the effective price is $800/month considering fuel & maintenance. Is that also problematic? Most people will initially compare the Model S'$60k price tag vs $40k for a Mercedes, but the total ownership cost figures tell a different story.

kirk21 13y ago
It is weird that they don't stress the reduced maintenance costs. When something breaks down it is always extremely expensive (or they are overcharging you). Consider the life cycle of a car and there is something expensive that will break down.
- ams6110 13y ago
  Most cars these days don't "break down." There are maintenance costs which may well be lower on the Tesla (though some new car deals include free scheduled maintenance), but bottom line, if you can afford a Tesla or another car in its price range, maintenance and gasoline are not costs that are going to be significant in your budget.
  - ricardobeat 13y ago
    Maintenance and repairs easily add 10% or more to the total ownership cost, and gasoline over 20%. $200/month adds up to almost $10k over 4 years.
baak 13y ago
I don't spend $261 in fuel every month. Actually, closer to $70. A friend of mine makes a road trip every week for business. Do they also add the cost of the time you spend waiting for a charge at charging stations vs a quicker gas pump for road trips? A full charge is about an hour. Should the price be higher for him? Look, I'm not saying it's still not a decent bargain when all is said and done, I'm just saying you can't roll it into your 'cost' and advertise that as the price you want me to pay. I am not paying that. I'm paying 190 bucks more a month based on my current fuel usage. My friend would be paying for it in an extra hour a week at least. These things count too.
- ricardobeat 13y ago
  Have you been to the website? It's a calculator, you put in your mileage and other costs and it gives you the TOC. $580/month is the best case scenario. You'll see they actually do the opposite, discounting for saved time, since 90% of the time you'll just plug it in at home and never worry about recharging during the day, instead of a trip to the gas station every week. http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership
eli 13y ago
Adding the cost of gasoline to gas-powered car makes sense in making a buying decision. So does adding the cost of electricity to a Tesla. But subtracting the gas costs that you aren't paying from the Tesla does not make sense. The cost of owning a Tesla should not vary based on what you're comparing it to. If I decide to get a Tesla instead of bike to work does the Tesla now cost more than $900?
- CamperBob2 13y ago
  Why not? The comparison assumes you are otherwise in the market for a gas-powered car that will cost $300/month above and beyond your car payment. Yes, if you park the car and never drive it, the gasoline-fueled vehicle will be cheaper. But that isn't a meaningful use case. I don't get the controversy...?
  - pfortuny 13y ago
    The only honest comparison is ADDING the gasoline cost to the gasoline car: otherwise you are simply LYING: because the payment is 900 whatever the gasoline costs. What it I spent 1000$ in gasoline a month? Would I get a free Tesla?
    - CamperBob2 13y ago
      But I don't understand why you wouldn't consider the cost of gasoline when considering how much it costs to own and operate a gasoline-powered car. It just doesn't make the slightest bit of sense. If your transportation budget includes $1200 a month for gasoline, then you could get another Tesla simply by giving $900/month to Tesla instead of the oil companies. (All of this assumes that the cost of electricity is free, which is of course bogus.)

gamblor956 13y ago

It's still bad math. The fuel savings are relevant only where you are directly comparing monthly costs of the Tesla to other cars. Gasoline is not a cost of the Tesla; not paying for gas doesn't change your monthly Tesla costs. You'll always pay at least $X. The fact that you're not paying $Y because you didn't buy Z is not relevant to calculating $X. It's disappointing to see that Tesla still relying on misrepresentations to sell its cars.

jwegan 13y ago
I think it is fair for Tesla to put that in. Many people start off car shopping by comparing monthly lease amounts for a range of cars to figure out what is in their price range. However, at this high level overview, it can be easy to forget to factor in items such as gas into the monthly cost. Tesla marketing is simply doing their job and making sure consumers don't forget to add the price of gas to gasoline cars, by making a point of subtracting it from their car.
- psbp 13y ago
  So if I lease a gas powered car and I take a month-long vacation, will I get my money back?
  - ericd 13y ago
    Be fair, this is an uncommon scenario in the US. Even if you do this, it's amortized over the months you're not out of town.
PakG1 13y ago
It always seemed to me that they're comparing total cost of ownership of cars, not direct costs of purchasing cars. If it's total cost of ownership, it's an absolutely fair comparison.
- eli 13y ago
  But gasoline has nothing to do with the total cost of ownership of a Tesla. If they wanted to have a calculator that showed you the "real cost" of a competitor's car (with gas included) vs a Tesla (with electricity included) that would be a fair comparison. If I bought a Tesla it would mostly be replacing bus trips not another car. That shouldn't have an impact on the cost of owning a Tesla.

nineteenturtles 13y ago

My biggest question is with the -$95 a month they attribute to the guaranteed resale value. I can't immediately tell how they came up with that.

andrewtbham 13y ago
This is a plan to effectively lease the car for 3 years (with the tax credit benefits of buying). At the end of 3 years, you will get back the $95/month, when you trade it in. (so it's the resale value minus what you still owe on the car)
- uvdiv 13y ago
  That doesn't make sense. Other cars have resale value too, so how is this a comparative advantage? Why are they subtracting this off? Google suggests the "average" car actually has higher resale value, at the same age/mileage, than what Tesla is guaranteeing: (I guess they're comparing to a subclass of luxury car which depreciates faster) http://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html http://www.edmunds.com/car-buying/how-fast-does-my-new-car-l...

Zoepfli 13y ago

What about battery replacement cost? AFAIK, Tesla buyers are looking at a $20k line item 5-10 years down the line here. Something gasoline cars don't need. By talking about gasoline cost in their car price calculator, Tesla is going for a "total cost of ownership" thing, so why is battery replacement cost not included? It looks to me as if Tesla is eager to talk loudly about the unique costs of their competitors, while keeping quiet about the unique costs of themselves.

jacquesm 13y ago
That will be reflected in the resale value of the vehicle. Very few first time buyers will own a car longer than 5 years (even if that would be the most effective way of using their money). Likely the car will be traded at least once in those 5 to 10 years.
- Zoepfli 13y ago
  Of course it might be reflected there. But Tesla is not saying anything to the line of "resale value might be lower than a comparable gasoline car because the battery will have to be replaced" either.
  - marvin 13y ago
    This is incorrect. Tesla explicitly guarantees the resale value of the leased car. http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership
    - Zoepfli 13y ago
      Interesting. But my original point stands: if you don't sell your car, you're looking at a $20k bill a few years down the line, and on the page Tesla are happy to talk about total-cost-of-ownership of their competitors, they're not telling you about that $20k replacement.
      - 13y ago

paul_f 13y ago

I'd be more willing to accept his apology if he didn't then drop this absurdity. How much actual money do I pay for the dang car? I have my checkbook out, what do I put in this box?