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Tesla Model S – Cost of Ownership vs. Honda Odyssey

• roel_v 13y ago
  Well the core insight is in there, but it's not highlighted enough: "The model is very sensitive to the rate of depreciation." Every TCO model for cars is very sensitive to rate of depreciation, and this rate is very hard to predict. You can rely on historical data only so much - how much in demand will petrol cars be 8 years from now? Diesel? What kind of tax incentives will we get over the next few years? And a single percent difference in depreciation rate can put one car ahead of another. Within the last 10% or so, it's a crap shoot. And 10% basically puts all cars in the same class within a single bucket. So yeah.
• deleted 13y ago
  [deleted]
• dandroid1 13y ago
  What's with the article's font? Very annoying to read. Looks like a printer running out of ink.
  • atmosx 13y ago
    Yeah, I agree. Extremely pure choice of <p> color, given the white background.
  • pokpokpok 13y ago
    zoom you browser in 10% (ctrl+). i get this issue on a lot of personal blogs and this always fixes it to some degree
  • pyronite 13y ago
    Are you running it in Chrome/Windows? If so: Chrome's font rendering uses GDI rather than DirectWrite and it leads to some very ugly rendering with certain web fonts. This is a known issue and they are working on changing this: https://code.google.com/p/chromium/issues/detail?id=137692#c109 https://code.google.com/p/chromium/issues/detail?id=137692#c...
    • dandroid1 13y ago
      Yup, I am. Thanks for the info.
  • pakile 13y ago
    Haha, thanks for pointing that out. I'll play around with it after dinner and try to find something less annoying.
• zyang 13y ago
  Would you buy an eight year used Tesla for 30k? I'm a fan of Tesla and hope to be an owner some day, but I think the author is being overly optimistic here.
  • btian 13y ago
    Yes because an electric car lasts much longer than ICE ones
    • Shivetya 13y ago
      Not necessarily true. However the bigger concern is technology. The tech behind the batteries in a current generation Tesla will be probably one or two generations removed. Meaning, your going to get soaked on first generation buys. Now Tesla does have swappable packs but the unknown is, how much will a replacement pack of second or third generation cost and will you be able to install it in the first generation car; I will assume you can. The Tesla lower depreciation is factor of limited supply and the author is taking a mighty big bet that demand will remain as high as it is. Given Tesla's stated goals for manufacture and the models coming this is not a good bet. Toss in that California may cap tax incentives to EVs costing 60k or less; I would push that to 40K or less. The rich should never have been given help to buy a car in a price range they already purchase in. This car certainly did not need the incentive.
      • alexkiritz 13y ago
        You're not understanding the point of the rebate. Part of the purpose of the rebate is to finance car companies selling viable electric cars so that they can later on down the road make more affordable cars.
  • njharman 13y ago
    I might if we knew how long battery packs lasted and it was available now and not 7+ years from now when there'll be better cheaper options. So, I guess I agree. Optimistic.
  • arjunnarayan 13y ago
• Danieru 13y ago
  I was curious about the RAV4 EV comment so some googling turned up this: http://www.caranddriver.com/features/throwing-money-at-electrics-feature http://www.caranddriver.com/features/throwing-money-at-elect...
  • dm2 13y ago
    Wow, why are the big automotive companies so bad at making a good looking electric vehicle? Or are we just spoiled with the looks of the Model S? From the article you linked to: "GM is reportedly losing more than $40,000 on each Volt" WHAT?
    • mikeash 13y ago
      Also, "Not even Tesla has made money from building its slick Model S." Smells like funny accounting.
      • dm2 13y ago
        Apparently they're adding in R&D. http://jalopnik.com/5942352/gm-isnt-really-loosing-all-that-cash-with-each-volt http://jalopnik.com/5942352/gm-isnt-really-loosing-all-that-...
        • mikeash 13y ago
          I just stumbled across that same info, came to post it, and saw your reply. Stuff like this really makes me wonder about the authors of articles like this. Are they actually so stupid that they think it's reasonable to allocate the entire R&D effort to 20,000 cars sold to date? Do they know better, but are trying to make GM look bad for some reason, and think their readers are that stupid? It's just so weird.
  • robterrell 13y ago
    The RAV4 EV is Toyota's California compliance car -- that is to say, in the state of CA, any auto manufacturer must sell a certain % of their sales as zero emission cars. For Toyota, that meant 2300 or so cars. They ended up putting a RAV4 body/interior on top of Tesla-sourced frame, motor and battery back: the $50k RAV4 EV. It's been a lousy seller. Toyota only sold 26 vehicles in December, so they've got huge incentives. Currently the incentive is $16,000 IIRC. You can lease the RAV4 EV for $299 per month with $3500 due at signing. I drive a Fiat 500e, which is a fantastic electric car ($199 lease!) but anytime I'm loading up kids and groceries I wish I had one of those cheap pseudo Teslas.
• bsilvereagle 13y ago
  Does anyone know why the Net Present Value in the cash flow model is so much different? Depreciation Model: $39,889 Cash Flow Model: $62,874
  • pakile 13y ago
    Travis (who forked my model to create the cash flow model) and I chatted about this. It's primarily due to the effect of time value on money, when you finance the car. If you were to purchase the car outright, you would want to use the 1st tab; vs. financing, the 2nd tab.
    • bsilvereagle 13y ago
      Ah I missed that payments were being made on a loan, thanks for clarifying that.
• yalogin 13y ago
  Can some one explain NPV to me? This is the first I am hearing of this term and wikipedia does not offer an explanation that is intuitive enough. Its odd that the NPV is listed as $40K+ when the actual cost of the car is $90K+.
  • dm2 13y ago
    https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/present-value/v/introduction-to-present-value https://www.khanacademy.org/economics-finance-domain/core-fi... http://www.investopedia.com/video/play/what-is-net-present-value/ http://www.investopedia.com/video/play/what-is-net-present-v... https://www.youtube.com/watch?v=jylJ2r9bklE https://www.youtube.com/watch?v=jylJ2r9bklE
  • jellicle 13y ago
    Net present value is a way of measuring future flows of money and comparing them to each other. For instance, which is worth more: - Getting $100 now - Getting $200 3 years from now The answer is, "it depends on your assumptions about interest rates". In the blog poster's spreadsheet, the "net" line is the cost of owning that car in that year in that year's dollars. The PV is the cost of owning that car in that year in THIS year's dollars (a figure obviously depending on assumptions about interest rates). The NPV line is the cost of owning that car for 8 years in this year's dollars.
  • superprime 13y ago
    The underlying idea is that a dollar today is worth more to you than a dollar tomorrow (all else equal). The NPV is how much a thing is worth/costs now after taking that into account and discounting future cashflows appropriately.
• BenefitOfDoubt 13y ago
  Talk about a worthless comparison... Auto loan and insurance costs completely left out? (and these are big factors) Depreciation in a high state of speculation? Comparing a top of the line minivan with a mid size car? A commuter/short trip car (imagine big road trips planned around recharge stations) vs a touring vehicle. I realize there is other cars besides the Odyssey compared, but why so much emphasis put on the minivan comparison? How about comparing as close of a car luxury, feature, reliability and purpose wise?
• natural219 13y ago
  I have also ran similar calculations in my head. I think what I'd want to be convinced is a thorough analysis from a mechanical/industrial engineer on how much you can expect to save from a fully electric car on maintenance. The claim I've heard from Tesla is that, since there are much fewer moving parts within an electric motor, the car will last substantially longer. While this makes intuitive sense, I would love to see a breakdown of the actual numbers. Gas savings are pretty easy to calculate. That said, there is one more factor I had considered, for fun. If Tesla continues to deliver more cars and eventually electric cars dominate the new car market in 5-10 years, I would imagine the Model S would be worth an investment as a "classic" car. If you maintained it well, I wonder if the actual value of the car would have a chance of appreciating at a much higher rate past, say, 50 years.
  • jesusmichael 13y ago
    The statement that electric motors have fewer moving parts so they last substantially longer is a fallacy that electric car proponents have been spreading for years. There are still many, moving parts which require servicing and can fail at a rate of similarly serviced gas engines. In fact servicing (rewinding) is quite a labor intensive and expensive operation, given the price of copper or other conductive material used in the construction of electric motor. Should a motor fail. The cost is significant. I like the idea of an electric car, but the truth is the motors do fail. They require maintenance in the static environment of a factory or they will fail, a car on the open road with harsh environmental factors it will be hard on them. But the biggest lie about electric car maintenance is that is lower. Its not. 90% of a vehicle's maintenance has nothing to do with its motor. It's tires, brakes, lighting, lubricants(yes electric motors need oil changes too), and power systems. Which I suspect will be more extensive here since there will be countless OS upgrades to both the drive systems and the power control units. Its not possible at this time to compare gas engine maintenance w/ electric motor maintenance because its not apples to apples. You can however look at replacement cost as an indication of serviceability. A 400hp electric motor costs about $24,000 vs. a 400hp gas engine at about $6000. The gas engine is still far more economical at this point even factoring in fuel costs.
    • 13y ago
• ams6110 13y ago
  His use case for the Odyssey must be atypical from what I've seen, that is, it's used mostly for short local trips. What most people I know use their minivans for is that, plus family road trips. Not really an option with the Tesla.
  • pakile 13y ago
    Feel free to play with the annual mileage figures on the model. For my family's situation, I played around with it with mostly either 12K or 15K annual miles.
  • mikeash 13y ago
    There are a fair number of people who don't do road trips. It's not a universal thing. For those who do, how often do they take them? If it's a once-a-year thing, you can rent something more suitable for fairly low cost. I see a lot of people basing their car buying decisions on activities they do once or twice a year and it puzzles me. Finally, not all road trips are created equal. If you're regularly driving across Montana, the Tesla is probably not for you. For me, where my road trips consist of occasional trips from DC to NYC or Virginia Beach, the supercharger network means the Tesla would be fine.
• dave1619 13y ago
  To help some understand why the Model S could be "cheaper" to own vs a Honda Odyssey it's important to understand a few factors: 1. Low fuel costs - electricity is way cheaper than gas and when you factor in gas savings over 8 years, you get substantial savings (ie., $20k over 8 years if driving 15k miles a year, of course depends on gas prices and electricity prices). 2. Low maintenance costs - there's no oil changes, timing belt, etc. It's basically tires. Even brakes you don't need to change often because of regenerative braking. 3. High residual value due to upgradeability - the battery pack is swappable, so after 8 years (or longer) you can swap out battery packs to a bigger pack (ie., 400+ mile range). This is a great feature and will add residual value to the Model S. Also, over-the-air updates keeps the software always up to date. 4. High residual value due to battery pack - the battery pack for the Model S is holding up well with customers so far, and after 8 years it should show minimal degradation (ie., 10-15% likely, max 20%). In other words, the battery will still hold substantial value and when a person buys a 8-year-old Model S in the future, they are not only buying the car but they are buying the battery pack (ie., fuel savings) as well. This is why the residual value of a Model S (or another EV with a large battery pack) will be substantially higher than a comparable ICE car.
  • jusben1369 13y ago
    How much is a replacement battery? EDIT: found the answer below. Seems like that contradicts your post a little.
    • bsilvereagle 13y ago
      "A Battery Replacement Option will be available for purchase soon. The option allows you to pre-purchase a new battery to be installed after eight years for a fixed price: $8,000 for 40 kWh batteries, $10,000 for 60 kWh batteries, and $12,000 for 85 kWh batteries." http://www.teslamotors.com/it_IT/forum/forums/battery-replacement-cost-0 http://www.teslamotors.com/it_IT/forum/forums/battery-replac...
      • schiffern 13y ago
        Note that this 'option' has never actually been available for purchase and relies heavily on projected future cost reductions. The battery replacement price as of December 2013 is $44,564 for the 85 kWh battery and $37,102 for the 60 kWh battery. http://www.greencarreports.com/news/1089183_life-with-tesla-model-s-battery-upgrade-from-60-kwh-to-85-kwh/page-3 http://www.greencarreports.com/news/1089183_life-with-tesla-...
• bpowah 13y ago
  I don't understand how the '14 model S is "AWD equivalent".
  • pakile 13y ago
    Scroll down to "Cold Weather Performance" on this page: http://www.teslamotors.com/models/features#/performance http://www.teslamotors.com/models/features#/performance I forgot to write about this on www.teslacost.com, but one reason I didn't consider the Model S early on is b/c it's RWD and I wanted AWD for Tahoe and the like. Then I saw the above video.
    • bri3d 13y ago
      You need to factor a set of good winter tires in the Tesla sizes into your cost model, then. The stock tires on the Tesla and even most all-season options are woefully insufficient to make the Tesla safe in the snow, although its favorable weight distribution vs. other RWD cars does help some.
    • mikegreen 13y ago
      There is no way a car with only the ability to power the rear wheels can compare to an AWD drivetrain. Even with the ability to pulse/modulate the brakes and keep the car from spinning, it will only prevent sliding off a cliff by taking you around that corner at 8mph (notional absurdly low speed here). That is because it will only be able to use the braking + lateral portion of the front tires available grip. If there is no need for braking, just lateral grip which isn't going to be much on a poor snowy road, anyhow. The rear tires have to work doubly as hard in this scenario as well - they have to maintain lateral grip while accelerating (or simply putting power down enough to maintain speed). A true AWD (or 4x4) would be able to use the acceleration and lateral grip, meaning, the tire can be accelerating and turning. This takes the load off the rear wheels for putting down engine power. Thus, to move at the same speed, the rear tires only have to use much less of their available grip for acceleration and can concentrate on lateral grip (not fishtailing/oversteer situation as above RWD would). An intelligent AWD system will transfer power to whatever wheel has the most grip as well.
• plg 13y ago
  What about ruggedness? Up here in (eastern) Canada we have stretches of weeks even months where the temp doesn't go above ... 10F? 15F? (-10 to -15 C) and frequently goes down to -20C or lower (below zero F). How does this affect battery range? Also I don't live in a big city, so who in the hell do I call when there's something wrong with my Tesla and how long do I wait?
  • plg 13y ago
    also NPV is nice and all, but if you have $5k for a downpayment and you need to finance the rest, there aren't many people who can afford a $95k car loan. Not to mention the interest cost. Hey don't get me wrong, I think Tesla is the future and I would love to own one... but it seems like a "not ready yet" proposition
    • jamesaguilar 13y ago
      I think he's taking as given that he can afford the car. Which is fine, if he can afford the car. A decision model is not necessarily meant for all possible audiences. Sometimes it's particular to a person in a particular situation.
      • plg 13y ago
        true
  • erikstarck 13y ago
    If it's good enough for Norway it should work in Canada too, right? Well, one in every ten cars sold (10.8%) in Norway in March was a Tesla... http://cleantechnica.com/2014/04/04/7-tesla-norway-facts-will-blow-away/ http://cleantechnica.com/2014/04/04/7-tesla-norway-facts-wil...
    • vacri 13y ago
      Canada is a "Big Country" nation, and Norway isn't. Short or shortening range will have less of an effect on purchaser decisions.
• sgustard 13y ago
  TLDR: Tesla P85 $44,948 Honda Odyssey $56,094
• joezydeco 13y ago
  Out of curiosity - what does it cost to have an electrician install a 240VAC outlet in your garage? Has anyone out there done it and can give an idea? Teslas can charge off a 110 outlet, but they recommend using the 240 volt faster-charging unit. But most houses don't run 2-phase power out to the garage. And what if you don't own a house? What do apartment and/or house renters do for charging?
  • techsupporter 13y ago
    My electrician in the Seattle area quoted me $700, including parts and permit, to install a weather-shielded 240V outlet with separate breaker on the outside of my house directly above the electric meter, next to where a car is parked, and on the opposite side of the wall where my breaker panel lives for another purpose. (I don't have a garage so it would have to go outside if I did want to charge a car.) The cost probably goes up another hour of time if a person wants something like this and the breaker panel isn't also located in the garage since wire will need to be pulled. Apartment dwellers and renters of houses are going to be charging from 120V stations. Considering the uproar just over satellite dishes, I can't see landlords being any more forgiving about tapping into the electrical system of a unit. (And I write this as a former long-time renter.)
    • oasisbob 13y ago
      For what it's worth, at least renters have some protection from the FCC (on paper, at least) when it comes to antennas: "The OTARD rule allows local governments, community associations and landlords to enforce restrictions that do not impair the installation, maintenance or use of the types of antennas described above [...]" http://www.neighborhoodlink.com/article/Association/FCC_Satellite_Antenna_Regulations http://www.neighborhoodlink.com/article/Association/FCC_Sate... Given that many areas mandate minimum parking requirements for development, I don't find it too hard to imagine the same for charging. (And as a long-term renter, I'm sure it'll still be a pain in the ass for years to come.)
      • joezydeco 13y ago
• dror 13y ago
  The Model S was highly rated by Consumer Reports, but the predicted reliability is only average. Specifically, the 2013 had a much worse than average rating for Squeaks and Rattles and Body Hardware. This will certainly affect the price. Personally, I never buy a car unless it's rated better than average by CR.
• pkaye 13y ago
  If electric cars are already a good deal do we still need to have tax incentives?
  • tomschlick 13y ago
    I'd say so. It provides long term benefit to the society as a whole if larger numbers of these cars are purchased (less emissions, lower demand for gas, better safety, raises the bar for other manufacturers, etc)
• electriclove 13y ago
  Your Net values for the Ody Touring Elite don't add up. How is the Net for Year 1 for the Ody Elite $16,184? It lists Maintenance at $300, Fuel at $2727, and Depreciation at $10,500. That totals $13,527.
  • pakile 13y ago
    Good eye, electriclove - there was an error in the spreadsheet that was adding in fuel costs from another row. I updated the spreadsheet. It results in a pretty big change. I'm going to update the website.
    • electriclove 13y ago
      Thanks for replying and looking into it!
• deleted 13y ago
  [deleted]
• mintykeen 13y ago
  I think it's priceless to be able to look your kids in the eyes and say we bought a car for our family that helps make the planet better for you when you grow up. And supporting a company that is trying to do that is well worth spending more.
  • harmegido 13y ago
    If it makes you feel better, then great. But realize that any amount of individual actions isn't going to make a difference. We need action taken by governments.
• marknutter 13y ago
  Did he factor in the cost of replacing the batteries eventually? Something like $10k.
• D_Alex 13y ago
  The model seems flawed. The financing/opportunity costs are not included (AFAICT...). A better way to construct the model would be to avoid trying to account for year-by-year depreciation, and only include the initial purchase cost and eventual sale cost in the cash flow. Unfortunately (you might be able to tell I'm a Tesla fan), this makes the Tesla S less attractive in comparison to other cars due to its higher up-front price.
  • loceng 13y ago
    They're target market initially is those with cash / who can afford it upfront, though they do offer leasing. Once they have the $30k version then it will be attractive to most everyone, including with leasing options.
  • pakile 13y ago
    Your proposal is essentially what my friend, Travis, did on the 2nd tab of the worksheet, which is a cash flow model.
• chrisBob 13y ago
  The Model S is a great deal compared to similar cars, but this list is just silly. He is an economist that just goes through and picks the highest trim level of 9 different cars, and then decides to compare them based solely on cost to the Model S. I contend that a $22,195 Subaru would win this contest hands down. If you want this comparison to be believable compare like vehicles. Don't just compare the car you want to theMostExpensiveHondaICouldSpecOut.
• pakile 13y ago
  I'm the author of this website/article, and I have an important update. I added this Epilogue to the website tonight: -- I created this website two days ago, and during that time, have witnessed 100s of comments on Hacker News, TMC, Twitter, and more. In the middle of all that, electriclove on Hacker News found an important bug in the model: The Ody PV line was adding in fuel costs from another car. (This, IMHO, highlights how valuable the Internet is for discourse and fact checking.) I updated the model and the result is as follows: - Tesla Model S: $40,151 - Honda Odyssey: $37,235 The end result is greater parity between the depreciation and cash flow models; and the edge goes to the Honda Odyssey by $3K, or about $375/yr over eight years. If I had more time, I might try to quantify the value of the safety edge for the Tesla (Travis calculated this to be about $500/yr), HOV lane access, or other features. In the meantime, I double-checked the formulas on the other cars - they appear to be correct. However, I continue to invite folks to continue to look at and provide feedback on the model.
• bironology 13y ago
  what the heck is the PAX column? Feeling stupid, never heard of that, and Googling doesn't help. Pax tires? as in run-flats?
  • electriclove 13y ago
    PAX = Passengers