Why Buy An EV?

Why Buy An EV?

April 20 2021

The Model Y. The Model Y is a mid-size crossover that is a very popular car for Tesla. It is comparable in size and features to a BMW X3. Tesla does not advertise and it does not have a dealership network, just a website where you can shop and place your order, and locations where you can take delivery. The Y “Long Range” model costs $50,490 and is heavily loaded with best-in-class technology, an excellent sound system and navigation, a 15 inch touchscreen, all-wheel-drive, and 0-60 in less than 5 seconds. A similarly equipped BMW X3 costs about $45k. The Model Y has an EPA stated range of 326 miles on a full charge. Importantly, Tesla vehicles can be charged on Tesla’s Supercharger network. The Y is a good-looking car, makes almost no noise, emits no exhaust, is safe in collisions (5 stars in every category), needs very little maintenance and is super fun to drive. Late night legend and car collector Jay Leno, loves and recommends it as his daily ride. But charging and range are still a mystery for most folks.

How to Charge: The Tesla Y has a battery with 75 kilowatts (kW) of capacity. The Tesla Model 3’s battery is similar (it’s a $40k car) while the higher end Model S ($80k) boasts a 100 kW battery. The standard 120 volt, one kilowatt wall outlet in your house would take 75 hours to charge your Y's 75 kW battery. Tesla’s $500 “Wall Connector” is therefore necessary to charge at home, which will charge your 75 kW battery in 4-10 hours (depending on your home’s electric system). All in, with the electrician, it costs around $1500 to install. That solves for folks who drive less than 300 miles a day, all without stops to pump gas. For those without home chargers or when on the road, the Tesla Supercharger network consists of 20,000 charging stations strategically located in populated areas and near highway exits. Their locations instantly pop up on the Y’s navigation screen. The Superchargers can deliver from 50 kW to 250 kW to charge your Model Y in 20 minutes.

Charging Cost: A BMW X3 gets about 25 miles to the gallon; it consumes about 500 gallons of gas to drive 12,000 miles per year, which costs about $1,500 annually. The cost of electricity for 12,000 miles of driving a Y is about half that at a Supercharger and about 66% less on a home Wall Charger. If you already own your own solar panels and can charge during the daytime, it’s free. Assume $750 in savings per year -- that’s $2,250 over 3 years.

Depreciation: The Y only started selling last year but the Tesla Model 3 retains about 77% of original value after 3 years, the highest of any vehicle in the US. A BMW X3 retains about 65% of original value after 3 years. This 12 percent difference on a $50,000 car is $6,000 in total over 3 years. This is explained in part by the BMW’s service life of 200,000 miles (at best) while the Tesla is in the 400,000 neighborhood. An EV only has 20 moving parts compared with nearly 2,000 in a gas driven car.

Incentives: The proposed Biden infrastructure plan includes installing 500,000 additional charging stations providing ample charging options for all EV makers. Equally significant, existing law provides for a $7,500 dollar-for-dollar tax credit for the purchasers of the first 200,000 EVs sold by a given manufacturer. Tesla and GM have passed that number and no longer receive that benefit. The Biden plan is not yet fully fleshed out but will likely provide new EV incentives in the form of tax credits or point-of-sale rebates without regard to the previous 200,000 car limit. The incentives may also favor American made cars. There are also existing incentives from different states of up to $2,000.

Other Models: Tesla is currently the clear leader but most car companies have already released excellent EV and Hybrid models. Ford is coming out with an EV version of its flagship F-150 truck and its iconic EV Ford Mustang is on the road. GM is going 100% EV by 2035 and plans to release 30 new models by 2025, including some larger trucks based on its massive new Ultium battery platform. There will be plenty of models to choose from, in addition to Tesla’s ever-expanding offerings.

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