Featured image: Tesla website for Model 3
A few weeks ago, I took our Tesla in for its two year service. Hard to believe two years have passed by for the vehicle that sparked our financial transformation.
I asked the Uber lady who was driving me back home how many miles she drove in a typical day. She was interested in getting an EV for her next vehicle and had many questions. She said it varied, but she spent an average of $30 on gas every day. I was shocked at how much she spent. This was a few weeks ago, when gas was around $2.50 / gallon in our area, and before the Colonial pipeline got hacked. I noticed she was driving a Toyota Camry. She was eager to learn more about EV’s, and happily knowing some things in that area, I proceeded to tell her.
I told her that my charging was about once a week, and an overnight charge was enough to recover 300 miles. The cost was about $7.50 per charge for my Model 3, at about 10 cents per KWh. I mentioned that the tires wear out faster, because of the extra weight of the batteries. She said that if it was that much cheaper, even with the tire replacement, that would be enough to pay for her car payment, which means more profit for her, and less paid for gas. Her entire EV payment could be covered from the gas savings!
I mentioned that EV’s are simpler to maintain, due to having dramatically fewer moving parts. No oil changes every 10,000 miles, no transmission oil changes, brakes last much longer, overall much less maintenance. This would be additional savings from moving to an EV. I could tell she was seriously considering making her next car an EV.
Let’s break down how much she could save, by switching from her Toyota Camry to a Tesla Model 3. According to fueleconomy.gov, the 2021 Toyota Camry LE gets 26 mpg combined on the city and highway. At $30 per day, and $2.50 per gallon, that’s about 14 gallons used for my Uber driver every day. That means she drives about 364 miles a day (which is 26 multiplied by 14 gallons used). Let’s say she drives 6 days a week. That’s about 113,000 miles a year, which seems on par for someone that drives full time. On Toyota’s website, a 2021 Toyota LE 2.5L 4-cylinder 8 speed automatic can be purchased for $421 a month, with $2000 down payment, 1.9% interest rate, and 60 month term.
According to Tesla’s website, a Long Range AWD Model 3 could be bought for $676 a month, with $4500 down payment, 72 month term, and 2.49% interest rate. This particular vehicle has an estimated range of 353 miles.
That means the Camry is ahead by saving $2500 up front, and $255 every month in vehicle payments. We have figured out that she would save about $22.50 in fuel costs per day. Fuel savings per month would be about $540, working 24 days a month. That means she would save about $285 a month in fuel. In about 9 months, that would be enough to cover her extra deposit for the Tesla. If we suppose the car lasted 3 years, or about 340,000 miles, over the remaining 27 months she would have saved about $7,695 in gas costs. That’s a large amount. By driving electric, she would have reduced C02 pollution and reduced noise pollution, even if those are benefits she didn’t care about. She gains faster acceleration, better safety, better tech and better mileage by switching to the Tesla.
The same TCO is not available from Edmunds for the Model 3. Fortunately, my friend Paul created a TCO in October 2018 for the Model 3 on Cleantechnica. I have to imagine the figures would be much better now. He calculated the 310 mile Long Range edition had a TCO of $41,414. Depreciation is probably overestimated given how well Tesla’s hold their value and the tax credit of $7500 is currently not available for Tesla’s. The LR Cash Price has been reduced by almost $4000 from 2018, with a longer range by 43 miles. With those adjustments, even with the higher price, the total cost of ownership is in line with the other midsize best sellers, if not lower. For my Uber friend, with more than 100,000 miles driven per year, depreciation, fuel, insurance, maintenance, and repairs will be much higher for her Toyota Camry versus a Tesla Model 3.
The end result will be those Uber and Lyft drivers that switch to electric vehicles first will have a significant competitive advantage over those Uber and Lyft drivers that continue to use gas counterparts. They’ll tell their friends how much they are saving. Those friends will want to buy electric vehicles, too. At some point in the next five years, the depreciation alone on gas vehicles may be the entire cash price. No one will want to buy a used one in Europe, many will have doubts in the USA. The TCO will get better ever year, as battery electric vehicles inch closer to gas vehicles in price, and eventually are cheaper.
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Thanks for reading!
Warmest regards,
smilingdad
smilingdad 