"TCO"
(Total Cost of Ownership)
By Don Bennett, decades-long EV researcher
You've decided it's time to buy a new car. And great, you've decided that it will be an Electric Vehicle now that EVs have come into their own (the technology has matured enough to make them a serious contender for purchasing), and you decided on an EV because you discovered that they are less expensive to own than a gasoline-powered car. But now the question is: Which EV?
What could your considerations be?
Safety
Reliability
TCO
Range
Utility
Features
Color
Engineering
How much does the EV manufacturer really care about the customer
What company do you want to give those many thousands of dollars to
In this article, we'll look at TCO (the other ones are discussed here). TCO is what you'll spend on the car over the entire time you own it. With a well-made EV, this can be 20+ years, easy.
PURCHASE PRICE
When looking at any car – gas or electric – the Total Cost
of Ownership (TCO) should be considered, and not just the initial purchase
price. And this is especially important when comparing a gas-powered
car to an EV (because EVs have a much lower TCO than gas cars). So if
an EV's purchase price is $4000 more than an equivalent gas car, the
EV's TCO will still be less than the gas car's TCO over the ownership
life of the vehicle.
FUEL COSTS
One reason for an EV's lower TCO is that the fuel costs are different.
Gasoline versus electricity has the latter being less in price per unit
of energy than gasoline. So the fuel for an EV is less per unit of energy
than the fuel for gas cars (this has to do with the different costs
for transportation of gasoline versus electricity).
But the fuel savings don't stop there. A decent gas car gets about 28
MPG, but a decent EV gets around 110 MPGe (the "e" stands
for "equivalent"). And this is an apples-to-apples comparison.
So which kind of car is more energy efficient? EVs of course. And this
means much less money spent on fuel over the ownership life of the car
if it's an EV.
REPAIRS
TCO also includes
out-of warranty repairs. If you intend to keep your car for more than
four years, you'd want a car that has the least likelihood of needing
out-of-warranty repairs, yes? Most legacy automakers design and build
their cars to have the least likelihood of needing warranty work, but
after the warranty is over, their dealers want to do repair
work because that's where they make the bulk of their profits. So the
cars aren't designed to the highest quality, which also keeps manufacturing
costs down which increases profits for the car makers too. But what
if there was an EV manufacturer where one of their goals
is to make a car that needs as little repairs as possible, even after
the warranty period is over. And they do this by using very high quality
parts, like the best bearings made so that the EV's motor will last
for 100 years or more, never needing any service. Fortunately there
is one EV maker who does this... Tesla.
And remember that EVs have no: engine, transmission, exhaust system,
muffler, high temperature/pressure cooling system, belts, spark plugs,
fuel injectors, fuel pump, starter, and no oil changes, and the brakes
last a very long time because of regenerative braking. So a lot
less to maintain and repair over time.
And it's good to know that Tesla's Service Centers are not a revenue
generating segment of their business, which is why they are very affordable
should you ever need out-of-warranty service. They even have mobile
service vans that can come to your car because 90% of repairs don't
require the car to go up on a lift. Do other EV makers have this? No.
|
If
you buy a Tesla EV, no more...
Oil changes |
INSURANCE
TCO also includes
insurance. And don't assume this would be the same regardless of what
vehicle you buy or who you use as your insurer. If you get a Tesla,
and your state offers auto insurance from Tesla or Lemonade (works with
Tesla to provide insurance), you can pay less per month if you're a
safe driver. These savings can add up to boatloads of money over the
ownership life of the car. How? When you get Tesla/Lemonade insurance,
you're asked if you want to participate in their Safe Driver Program.
If you tic "yes", you allow Tesla to monitor your driving
(no, not where you go, just how you drive), and if you're a safe driver,
Tesla sees this and lowers your monthly premium making it lower than
what you'd pay with any other auto insurer. (If you're a reckless driver,
don't sign up for this program.) And the more you allow the car to drive
itself, the lower your premium!
HONORABLE MENTION
Another plus for a Tesla: They sell direct to the customer... no
dealer to visit and therefore no dealer markups, and no salesperson
who tries to upsell you things you don't need... it's as easy as buying
something on Amazon (but there is some paperwork involved). Oh, and
Teslas are the safest cars made today (not an opinion).
"Street"
refers to Wall Street and their analysts.
TSLA is the stock ticker symbol for Tesla.
