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Real Long Term Cost vs. Battery life

let me start by saying two things:

a) I am very very excited to received my Tesla Model S
b) despite the questions below - I have placed my own money on this car…

Question and thoughts center around the longevity of the battery (a question no one can answer) and cost of replacement

1. we know the cost to replace an 85 kwh battery is ~$12,000
2. we know the warranty is 8 years/unlimited mileage
3. we know batteries maximum charge degrade over time
4. eventually it will be worth while to replace the battery to get back to the vehicle's original capabilities

therefore I believe we have the consider the cost of the battery replacement in the annual cost to "fuel" the vehicle and if you do this the cost to run the car per-mile vs. an ICE car by tesla's own numbers is not very favorable

Assumptions: 15,000 miles year, ICE 22 MPG, gas = $3.80 gallon, kwh's = $0.11/kwh

by Tesla's own numbers @ http://www.teslamotors.com/goelectric#savings
ICE Car = $2591 year in fuel cost $0.17 per-mile in fuel
Model S = $467 year in fuel cost $0.03 per-mile in fuel

that is until you figure in the cost of replacing the fuel tank at the end of an 8 year life span (the battery) - for which you have to budget $1500 year - making the cost of the Tesla's fuel system $1967/year or $0.13 per-mile in fuel…

now I know there are other costs the ICE car has - but for purposes of this thought exercise let's focus on the "fuel" system cost and treat the battery as the moral equivalent of the "fuel tank". Which in an ICE car doesn't shrink, or need to be replaced in 8 years.

Even a 16 year replacement is $750/year in "fuel" cost to the battery…that still seems to be far less of an advantage than most people would initially consider?

Are there estimates of what the maximum charge of an 85 kwh battery will be in 8 years? What % a year will we as customer lose? How much will my fuel tank shrink each year?

I'm thinking I would replace the battery after it loses 20-25% (300 miles - 75 miles of loss = 225 miles of range - time to swap batteries) of it's maximum range, and if that happens in less than 8 years my fuel-system costs now approach the cost of driving an ICE vehicle…

I'm still excited to get my car, and I'm committed to the success of EV's - but I'm still having trouble with the actual economic benefits when the total life cycle cost is considered - in this case the full costs given the battery replacement cost amortized into the car seem to dramatically change the cost curves.

thoughts, comments, if it takes 20 years to lose 10% capacity then we're good, however if it's more like 20% in 6 years I think the battery cost make the car more expensive to drive.

my concerns exactly and that's why I haven't finalized yet.

Dortor, why would you replace a perfectly good battery after only 8 years? When an ICE vehicle has a 3 year guarantee, do you replace the engine after 3 years?

While I think no one is indifferent to cost, no amount of analysis will result in a cost justification for this car. I doubt that anyone buys this car thinking they will save money.

You only need to replace the battery when it's remaining capacity is no longer adequate to meet your maximum driving range needs. Because you can always just charge up more frequently. Personally, I don't take many long trips much past 75 miles, so I figure it will be a GOOD LONG TIME before the battery has lost enough to crimp my style. I'm hedging my bets that by the time that happens, either: a) batteries will be much cheaper, or b) I'll have found another car I want more. Also, don't forget that even and ICE will need the engine rebuilt (or major repairs) after a long enough time/miles have gone by...

it comes down to how much does the battery degrade - which is something we'll only know over time - I was just pointing that since the battery is a consumable - it's replacement cost needs to be considered - if it gets "consumed" at a sufficient rate replacement may be more frequent that we realize.

I've noted that my other rechargeable devices lose about 7-9% max capacity a year. _IF_ the tesla battery is similar that would be 21% in three years. Translating a 300 mile range car into a 240 mile range car. 5 Years would be 195 mile range, and 8 years would be around 160 (if we lose 7% range a year) - so yes I would replace a battery after 8 years because it's no longer providing the same level of service and no longer meets my needs - the need to go more than 200 miles without a recharge.

I agree that no one buying this car should think they are actually "saving" money - but I was just wondering what other people's thought were on the "true" cost/mile if you factor in the battery replacement costs.

I guess it all comes down to: what % per-year capacity will the battery lose? If it's high single digits (7-9%) then the replacement cost needs to be seriously considered...this also affect resell value to a savy buyer…

If it's low single digits then the battery is a 12-15 year device - and I've never kept a car that long anyways…

anyone know what Leaf's are seeing as max capacity erosion over time?

Teslarumors.com takes a different approach, depreciating the entire car, and then comparing 5 & 10 yr. TCO (Total Cost of Ownership) of the MS is about the same as cars in the $30-40K range, and significantly better than more expensive cars.

and to specifically answer Mel - the battery is no longer "perfectly good" if it's lost 50% of it's capacity…so yes it needs to be replaced.

PS: other battery devices lack the temperature management of the TM system. This eliminates the major source of degradation: overheating.

the teslarumors site neglects to include the cost of a battery replacement in their TCO analysis. This may be accurate or inaccurate - only time will tell…

in fact I find it interesting that their TCO 5 year analysis is largely based on a $13,000 "fuel" savings - as a major contributor to the lower TCO. This is almost exactly the cost of the battery. If you include that the TCO is about the same as an ICE car - which is good, because it'd really suck if it were worse.

So I guess the question is: what will the range of a Tesla Model S battery be in 5 years?

Without that answer any TCO analysis is incomplete…

I'm still looking forward to delivery - got the delivery winder yesterday for mine - sooooo excited!

I'm just now very very skeptical of any actual "fuel" cost savings until I have the car for 2-3 years and verify that the battery isn't withering away quickly.

I don't think anyone is buying an $80k car because they hope to save a few pennies a mile on fuel. Even with a cheaper EV, such as the LEAF after the price reduction, it still takes several years to cover the initial higher price. There are many other benefits to driving an EV.

I am very excited to have just configured! I don't think I'm going to save money, though, buying this car. There just simply is not enough information yet. For example, questions that still need to be answered:
- Tesla's savings estimator has the total price of gas; some of this includes "taxes" that are used to fix the roads, and I guarantee that if electric vehicles become plentiful, the government will find a way to tax EVs for their share of road tax. This will erode the savings.
- There is a chance that batteries will be MUCH cheaper in the future, and gas will be MUCH more expensive. This will also affect your savings analysis.
- The assumption that you "save" $1500 or so per year as noted previously ignores the time value of money. Paying $10,000 for a battery in the future is better from a time value basis than paying $1500 for gas every year.

I really do hope that EVs do represent a future where drivers can save money with certainty, but I don't think we're there yet. But I'm still super excited and cant' wait for my beautiful car.

I don’t think it is at all unreasonable to factor in the technology advances in battery chemistry one can expect before the end of eight years. Yes, we have a current price list for replacement, but batteries should be far cheaper, lighter, and more powerful in a few years, and price lists accordingly reduced. This is especially pertinent since all the talk about range anxiety will certainly pressure scientists/manufacturers (i.e. Tesla) to focus great attention on battery advancements. Your cost/benefit and amortization schedules will change accordingly. I wouldn't get too concerned about today’s calculations.

nickniketown, are you 12 or what? All, I'm sure he's a kid. Look at all his posts. Definitely not in his teens that's for sure.

Dortor: Tesla uses a very conservative number for the cost of fuel for an ICE. That number is roughly appropriate for a Camry, but that is simply not a relevant vehicle. Vehicles that are comparable to a P85 cost more like $0.30 to run, and with that, the savings become much more substantial. That said, this car is not about being frugal, it is simply the best car, just like Tesla was trying for. Drive it for a while and all other cars seem old and slow.

First of all I dooubt the average cost of gas will be $3.80 per gallon over the next 8 years. (See the last 8 years.) Secondly, if the battery is guaranteed for 8 years the actual usefulness is likely much longer.
When Jay Leno in his piece about the Model S asked Franz von Holzhausen how long the battery would last (not what the guarantee was) Holzhausen answered 10 years. And 10 years as we all know is a very long time for vehicle life and an eternity in tech development.
Obviously no one can predict the future but I think the difference between fuel costs of an ICE & a Model S over the practical life of each vehicle is going to favor the Model S far more than the above scenario predicts.

I am days away from finalizing and am nervous over a few things but probably will do it. A few points. One you have to facter the loss of energy whem charging, the loss of energy from vampire draw which they say will improve, the loss of energy conditioning the battery, and any unknowns we dont yet know about. I drive a z4 thats ten years old and got 29 mpg over its life with real world stop and go traffic combined with hwy driving. Given the 20% supposed improvement of the z4 in mpg and the various unaccounted inefficiencies of the models s i computed the annual gas savings on todays dollars for nj where gas is cheap and elecric is high not to be that much. Granted its an unfair comparison because the z4 is a to seater, but often we drive my wife"s jetta diesel if we are together and the z is myself alone or with the fur child aka dog.
Jeff

It is unknown when a battery will need to be replaced (assuming reasonable wear and tear). One poster said the battery could easily last 20 years. So only te will tell how this shakes out in reality.

As for the whole issue of accounting for a new battery as fuel cost... Do you do this with replacing your engine or any other associated repairs to an aging ice? Why not? Why only do this with a battery car?

I think the cost of ownership of ms will be the real test of Evs future. Imagine only three moving parts to maintain as opposed the hundreds in ice and many more in the ever increasing hybrid world after 8+ years... Imagine having detailed logs of all your cars maintenance needs when walking into the mechanics garage... No one will be able to pull a fast one on you... They are forced to do honest work... How many times have you had u expected problems brought up by mechanics? Lots in my circle, believe me...

For me, I feel this car is dollar for dollar a deal over time... You just pay more upfront then the normal car so the savings don't stand out. Imagine when the genIII comes out... Probably will equate to the cost of a Sonic if you look at it from this perspective.

Long term savings is where this tech could really shine especially since the average length of ownership these days is 11 years.

Well, I have a 2000 Dodge Dakota that I use when I have a lot of stuff to carry. I just put $3,000 into a new transmission. Older cars cost money to maintain in tip top shape. Teslas, too. But instead of piston rings, headers, valves, trannies, etc, we have batteries to worry about. Seems like a wash to me.

Also, I got the 85KWh, but don't drive more than 50 miles for 90% of my days. So, as long as the battery can power 50 miles, I still have a baller set of wheels.

Also, at 8-10 years, the whole car is depreciated. An 85KWh battery performing at a 40KWh equivalent is still pretty well matched to the then current quality on the rest of the car. And that's a pretty worst-case scenario, right?

Also, how many of you 2013 Model S owners will still own your Model S in 8 years? I know some of you will...but most of you are rich, or are early adopters, or both...both categories tend to update their cars before 5 years.

The Model S with 85KWh simply has juice to spare to retain value even if the battery degrades. As we know, the average daily drive is about 35 miles. I'm just not that worried.

+1 Derek

The deal with long term savings will come when the first owners trade in or sell their ms and the follow on owners take on the car. I think those that purchase the 5 year old 85kw ms ( which is the person able to pay 35-50k) will experience the savings immediately. I have a feeling this market will be huge.

Electric Vehicles are more about saving the environment in the long run, not specifically saving money today.

An EV is a viable path to reducing carbon emissions: one of the few that I (and most driving citizens of this planet) can undertake easily. We are also in the process of installing a PV (solar) system to reduce carbon emissions further.

I did the TCO calculations. I noted for my expected driving distance that replacing the batteries in 8 years would add (ignoring NPV) $125 per month to my "fuel" costs. Shrug. Yup, add the cost of electricity and it's still in the same ball-park as an ICE.

The other inherent benefit of today's EVs actually comes from the fact that it is hard to get a big enough battery system to produce the range of the MS. This has forced the issue of pulling out the stops for all efficiency gains possible. You see this in the 0.24 DC, the regen-braking, etc.

In the end, it still beats the pants off of an ICE when it comes to the carbon footprint. With some luck and more people on this path, my kids and your kids might be able to live in a world with a stabilizing climate vs a run-away greenhouse.

@nickniketown - yes, you should stay with your Mercedes because they have door pockets and better lights in the trunk. That is definitely the deciding factor for me in buying a car. Since you clearly aren't interested in such an inferior car as the Model S, why are you still here at all?

Your story about the SmartEV rings false -- first, it is hard to simulate 4 years of use in less than 4 years (you can do cycles, but that doesn't exactly replicate it), and second there are lots of Roadsters out there for longer than 4 years that say differently, even saying the degradation is much lower than expected. For the Roadster, Tesla had to stuff the batteries wherever they would fit because the Elise wasn't designed as an EV, yet the Model S has improved battery technology on a number of fronts and could be expected to perform better than the Roadster batteries.

The path to achieving the environmental goals will be through creating a car that makes sense in financially to a target market. Mass market will be genIII, genIII will begin moving the dial on eco front. Not enough just to be emissions free in real world... Real world is like the frog that doesn't jump out of the boiling water (think al gore said this in his doc). Has to make sense to the wallet first before we make the leap.

dortor: There are a lot of flaws in your calculations/assumptions, but I will focus on the absolutely biggest one of all:

Including the $12,000 in the TCO is done incorrectly. If you replace the battery after year 8, you will be good for another 8 years. You will only need to pay $12,000 to replace the batteries once. You won't replace the battery after year 16 right before you junk the car... That means, using your method, you should put in $750 per year instead of $1,500.

Another question raised by this discussion is whether to pony up the $12k for the battery replacement as soon as the option becomes available. If battery technology improves as many expect, and costs come down, maybe the $12k up front is not a good deal.

One mitigant in these calculations of ROE and battery replacement cost is the time value of money over such a long period of time, 8 years. IN 2021, you will be paying for that battery in 2021 dollars, not 2013 dollars. Not true for gas cost, which you pay throughout.

Also, for the cost of the replacement battery in 2021, one can expect inflation impact on the currency to be more than offset by technological innovation savings. With gas, you may get technological advances in OTHER cars during that period that effectively reduce gas cost by increasing MPG, but your 2013 year model ICE car will have the same old fuel economy.

So I feel good about the battery issue you describe, subject to the great unknown -- how will the battery degrade over time BEFORE I get to the 8 year replacement point, and where will Tesla step in with its "unlimited" battery warranty to protect me against that range degradation. No answers except for "trust me, we'll do the right thing". One service rep told me they will constantly analyze the degradation on the general MS population, and if your degradation excessively exceeds that, they will honor the warranty. That sounds like "trust me".

@rdloftin1 - This greatly depends on your risk aversion. 12 grand today or 22 grand or more in 8 years in future dollars. Yes Tesla is a new car company but that doesn't mean the car was built by newbies. One of the greatest achievement in the evolution of humans was the ability to stand on the shoulders of those who came before us. James Clerk Maxwell, Michael Faraday, Nikola Tesla, Thomas Edison, Henry Ford all of these guys would be very interested in Tesla Motors and what they are achieving. There is no doubt that the suspension on this car was expertly tuned, the weight balanced just right. The car exude confidence, the kind you can only get from a superior build, using parts source from MB supplyers like the door switches and the steering tree. I've got mine and if anyone ever want to take this car off the road, they'll have to pry it from my cold dead fingers. It is the best car I have ever driven and the only car I truly feel is worth every penny.

Dortor
If you calculate the battery into consumables then you have to deduct it from the purchase price which would reduce the initial cost for the 85 kWh model by about $ 15'000.- (otherwise you calculate the battery price twice).

The questions for me regarding the battery replacement option are:

1. How long can I wait before exercising the option?

2. What battery will I get? Another 85kw (in my case) or a better one if available?

3. What warranty will the new battery carry? Would TM warrant the new one for more than 8 years, even if the new battery is built on superior technology?

No question that one's risk appetite factors into the decision, but I'd sure like to have these answers before the window closes.

Surely there must be some hard reliable numbers regarding the battery capacity-loss over time from all the Roadsters out there? Then it should be easier to calculate the battery-cost, even though there are a lot of unknowns (number of charging cycles, depth of recharging, the effectiveness of battery temp.control, currency-fluctuations, inflation, future cost of fuel, future cost of batteries and so on).

Or, most probably, that's what Tesla has done and figured out that the lifetime will be 8 years. Much more if you don't mind the drop in range.

I tried that fuel-cost-calculation myself some while back, and with Norwegian fuel prices remaining constant for the years to come (highly unlikely!) I figured I'd need to drive my (future) Model S at least 15 km pr day to be cheaper "fuel"-wise than an ICE-machine. This is for a period of 8 years, but as stated by a few earlier this should really be 16 years!

No need to cancel my reservation then. Not because of this at least.

Dr.Ling;
Many upgrades to the battery since the Roadster. Flat pack not the only one, many others.

Dortor;
What part of "depreciates the whole car" don't you understand? The battery is being written off at the same rate as the rest of the car. If you like, think of the write-off as money put aside to replace it.

Double-counting, and then again double-counting at the 16-yr. mark. You're obviously trying hard.


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