
Tesla Model S – Cost of Ownership vs. Honda Odyssey - United857
http://www.teslacost.com/
======
natural219
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
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.

~~~
jesusmichael
My source is an industrial electric motor supplier. Google "400hp electric
motor"

I'm not saying tesla's require oil changes as a gas engine does... oil will
last quite a long time when not contaminated by hydrocarbons.

But even sealed bearings need to be repacked after so much wear. To parts
can't move against on another without generating heat, which will degrade a
lubricant and allow wear.

~~~
leoedin
The mistake you're making is assuming that the single unit price of a low
volume device like an industrial electric motor in any way reflects its
component costs. High tech low volume engineering is dominated by R&D costs,
one off manufacturing costs and margin. You could apply your logic (it would
cost me $25,000 to buy one so therefore it costs Tesla that as well) to almost
any item of consumer electronics and you'd find that your cost estimation was
an order of magnitude (at least) above the retail price of a completed device.
Try pricing a washing machine based on the cost of its component parts online
- you won't be able to do it for anywhere near the cost in store.

When you build large numbers of integrated devices (be they washing machines,
cars or cell phones), individual unit costs of components are always much
lower. That's why we mass produce things.

~~~
revelation
And then you factor in that Tesla produces the majority of the motor in house
from raw materials.

------
dave1619
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.

~~~
brc
It's wrong to think that the majority of service costs as vehicles age is in
the engine and oil changes. Most new cars engines/tranmsmissions will go very
large distances with no mechanical failure if serviced properly. Exceptions
exist, but for the most part, engines are durable and have minimal service
requirements.

Cars must have suspension replacements, plus fixed for lots of little car
systems that can start failing with age. An example is windscreen washer
systems. Usually required for safety inspections, they can stop working, and
it's expensive to remove and replace them because they wind their way around
multiple components. Same for hvac systems and lighting systems and on it
goes.

I bring this up because the worth of a tesla will not just hinge on the
ability to fit a new battery pack and go. It will also hinge of the ability of
the basic vehicle and non-propulsion systems to continue to work and become
economically serviceable. Most cars can get a substantial mechanical refresh
for the current cost of a new tesla battery - but this is not usually done
because the car itself develops many other failings and a new one is faster
and easier to purchase.

So the resale value will swing on not only the battery replacement cost, but
may other things besides. Only then will we know what the used value looks
like.

~~~
bradleyland
I think the parent poster is making an "all things being equal" comparison,
where all of the things you mentioned should be equal when comparing to a car
with an ICE.

For example, both the Tesla Model S and a Honda Oyssey will, presumably,
require suspension replacement after a similar term when driven on the same
roads by the same person. Likewise for windscreen washers and other sub-
systems. Given the level of engineering and attention to detail in the design
of the Model S, we should expect these systems to be of equal or greater
quality than their traditional motorcar equivalents.

The point is that it appears the EV components won't negatively impact
residual value as many EV-naysayers have been touting all along. "Just wait
till that expensive battery pack only takes half a charge in 3 years!" That's
the kind of sentiment that the parent poster was refuting.

------
plg
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?

~~~
erikstarck
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-
wil...](http://cleantechnica.com/2014/04/04/7-tesla-norway-facts-will-blow-
away/)

~~~
vacri
Canada is a "Big Country" nation, and Norway isn't. Short or shortening range
will have less of an effect on purchaser decisions.

~~~
D_Alex
1\. Norway, like Canada, is sparsely populated country.

2\. I saw a Norwegian registered Model S in Zurich last week.

~~~
vacri
The distance between Oslo and Bergen is smaller than the distance between
Toronto and Montreal - which are fairly close to each other in Canadian terms.
Look at your population density maps of the two - Norway has most of its
people clustered around Oslo, whereas Canada has a wide spray across the
southeast. The distance from Hamilton to Halifax is basically equal to the
length of Norway, and it's only a quarter of the way across the country.

In any case, if you speak to travelled "Big Country" drivers, you'll find a
vein of amused stories at what plenty of Europeans consider to be 'long
drives'. And did your Norwegian cover that distance in a day or two? Because
it's a meaningless statement without knowing how long it took to get there -
it could even have been shipped up there (in theory, of course).

I have a driving endurance of about eight hours and I consider myself a
'middle-distance' driver here in Australia. Plenty of folks here can drive
12-16 hours, though more are like me. The 16-hour people aren't all that
common, but neither is it particularly remarkable.

~~~
venturenow
Whatever. Let's focus on the real facts instead of these anectodes about "Big
Country" "small country". I find this stuff fully meaningless.

Here's the full review with English subs
[https://www.youtube.com/watch?v=XZ5PqPeOPT0](https://www.youtube.com/watch?v=XZ5PqPeOPT0)

~~~
vacri
Apparently country size and population centres are anecdotal, dismissed with a
hand-wave? Besides, your 'real facts' video tells us pretty much nothing about
the differences between Canadian and Norwegian driving habits, and whether the
vehicle is as suitable for Canadian conditions as for Norwegian. "Suitable for
Canada" is not just "the vehicle can drive in snow".

A 300km range with a long refueling time is a considerable factor for
Canadians, something the video says little about. The distance between Toronto
and Montreal is about 6 hours of driving, which in turn is two times the cold-
weather range of the Model S. Given that you generally want to refuel before
you hit rock-bottom empty, and that battery performance will degrade over
time, that means two recharging stops in the Tesla, where you'll have to wait
for half an hour while the car charges. That adds an hour to your journey, and
means getting out of your car (in the cold) twice when you can get cars where
you don't have to do that at all.

I don't know why you're apparently put off by the idea that people in big
countries with good roads have better driving endurance than people in small
countries. It's no different to saying that the Norwegian public have a
stronger maritime tradition and are better sailors. Far more Norwegians own or
operate boats per capita than any of the 'big country' places. Should I post a
video of Canadian fisherman to 'prove with facts' that there's no difference
between the Canadian and Norwegian public when it comes to maritime choices?

------
zyang
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.

~~~
arjunnarayan
Well we know that Elon Musk has promised a buyback guarantee, indexed to the
buyback cost of a similarly old Mercedes S class[1]. So that sets a floor on
the depreciation value.

Also, as btian notes below, the electric drivetrain is also much simpler than
a gasoline one, so it should be in much better shape relative to non-electric
cars. I'm relatively optimistic because the part that depreciates the most is
the battery: and if the rest of the car holds up well, then switching the
battery at a lower cost (taking into account 8 years of battery tech
advancement) should make for a pretty high resale value.

[1]: [http://www.usatoday.com/story/money/cars/2013/04/02/elon-
mus...](http://www.usatoday.com/story/money/cars/2013/04/02/elon-musk-tesla-
lease/2047863/)

~~~
jesusmichael
Electric motor fail on average on par with similarly serviced gas engines.

Failure of motor bearings is usually the result of improper mechanical
installation causing undesirable forces acting on the bearings, or simply poor
maintenance. Bearings should be inspected regularly for lubrication and
uncharacteristic noises. Their life expectancy depends on factors previously
cited. Most motor vendors typically recommend bearing replacement every two
years, which I think will put a cramp in the Tesla maintenance scheme

What really is off-putting is that even if the car is well maintained and even
parked. It will brick as from the degradation of the batteries. At some point
the owner will have to invest in a new power pack. Not true of gas motors. I
have a 66' galaxie in my driveway with its original motor its never had more
than an oil and spark plug change and it has a life of nearly 50 years. I'd
have bought at least 3 tesla power packs in the same time frame, even if the
car just sat there.

~~~
mikeash
How much does a new electric motor for a Tesla cost versus a new gas motor for
a similar car? I'd guess it would be significantly cheaper, but I certainly
could be wrong. I don't know that much about cars.

Downvoted an honest question stated in a reasonable manner? Come _on_.

~~~
dangrossman
$10-20,000 for a 400hp electric motor. A gas engine would cost a couple
hundred bucks.

~~~
greedo
$200 for a 400HP car engine... They hyperbole is strong with this one.

The last time I had an engine rebuilt (mid 1980s) it was over $1100, and this
was for a 67 HP VW Beetle engine.

------
roel_v
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.

------
chrisBob
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_.

------
yalogin
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+.

~~~
jellicle
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.

------
pakile
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.

------
joezydeco
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
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
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_Sate...](http://www.neighborhoodlink.com/article/Association/FCC_Satellite_Antenna_Regulations)

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
I've used OTARD against a condo board where I lived, back when satellite
dishes were still new. OTARD could primarily exist because unit owners could
install dishes in areas that were "common" by the legal definition, such as
the exterior of a building, but "semi-private" by virtue of the unit owner
being the only one to have access to it, such as a balcony.

OTARD let you install a dish on your balcony, but not on the roof of the
building or the front lawn since that area was common to all owners.

I can't imagine a similar rule letting Tesla owners dig up parking lots and
install charging stations for their own private use. A parking lot is the
prime example of a common area that everyone can use and nobody can control on
an individual basis. And the outlets on the outside of a building or in a
parking lot are usually for the benefit of common-area maintenance workers,
not individual unit owners.

~~~
dublinben
It's quite common in many buildings to be assigned a single parking space for
your use. If you have one such parking space that is "yours," you could
install a high-power charger.

~~~
joezydeco
Not without tearing through "common" areas to install the wiring and connect
to the utility. And unless you plan to connect all the way back to your unit's
power meter, you will also need a meter installed in the common area that's
exclusively for your use.

------
dror
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.

------
Danieru
I was curious about the RAV4 EV comment so some googling turned up this:
[http://www.caranddriver.com/features/throwing-money-at-
elect...](http://www.caranddriver.com/features/throwing-money-at-electrics-
feature)

~~~
dm2
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
Also, "Not even Tesla has made money from building its slick Model S." Smells
like funny accounting.

~~~
dm2
Apparently they're adding in R&D. [http://jalopnik.com/5942352/gm-isnt-really-
loosing-all-that-...](http://jalopnik.com/5942352/gm-isnt-really-loosing-all-
that-cash-with-each-volt)

~~~
mikeash
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.

------
D_Alex
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
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.

------
bpowah
I don't understand how the '14 model S is "AWD equivalent".

~~~
pakile
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.

~~~
mikegreen
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.

------
ams6110
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
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.

------
mintykeen
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
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
Did he factor in the cost of replacing the batteries eventually? Something
like $10k.

------
pkaye
If electric cars are already a good deal do we still need to have tax
incentives?

~~~
tomschlick
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
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
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
Thanks for replying and looking into it!

------
bsilvereagle
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
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
Ah I missed that payments were being made on a loan, thanks for clarifying
that.

------
dandroid1
What's with the article's font? Very annoying to read. Looks like a printer
running out of ink.

~~~
pyronite
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#c...](https://code.google.com/p/chromium/issues/detail?id=137692#c109)

~~~
dandroid1
Yup, I am. Thanks for the info.

------
bironology
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
PAX = Passengers

------
sgustard
TLDR:

Tesla P85 $44,948

Honda Odyssey $56,094

