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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.

There are many factors to consider beyond cost such as:

1. Quiet
2. No exhaust
3. No oil changes/tune-ups
4. No transmission to replace
5. No antifreeze
6. No rusting body or undercarriage (95% aluminum)
7. Regenerative braking (longer brake pad life)
8. Fun to drive

My Mercedes cost $80,000 in 2002 and today I will be lucky to get $8,000 for it. ICE's in general are as close to disposable commodities as anything else. It actually takes a great deal of effort to dispose of them as they are toxic nightmares by the time they have reached the end of their life-cycle. At least with this car the few parts that there are, by comparison, can be replaced fairly easily and thus this will most likely be the last car I own.

Sometimes it helps to step back and see the forest from the trees.

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

Wait 5 years and you will know, nobody can answer you this right now. Or wait for the roadsters to be 5 year old next year, and ask an owner. It will still be guesstimating though, as the batteries are a different chemistry and have different temperature management.

You are right that without that answer, any TCO analysis is incomplete. That's why trying to make a TCO analysis on this car is an exercise in guesswork. You can either believe tesla (8 years, 20% capacity loss or whatever their official numbers are), and go for it, or not believe them and pass on the model S. Those are your only two choices. Even if some know-all battery expert told you that it's going to be fine, it is more than obvious you won't believe them, you have no reason to believe them, and will continue to doubt until you have the absolute proof. But then the proof in 5 years should be in conditions matching yours, not ideal, like california or some other warm place. So you will never know exactly, which is why you should never buy a model S, the chance exist you will regret it, and it won't make financial sense in the long run.

nickniketown, the Roadsters have proven the tech enough that I feel Tesla has a better idea about their batteries than you and whatever 3 cents you want to throw in.

Real world example from an average Joe like myself. I drove my S for 50+ miles Saturday. I plugged it in when I got home. I spent (from the plug) $1.67 to recharge the car. If I had drove my 12 year old Saturn I would have spent $7.93. If I would have driven campsalvage's Z4 I would have spent around $6. I am happy and do not care about the battery. I will be trading the S in for two GenIII's when they come out.

nickniketown will never know anything except he can't afford the car in the first place.... and that's really the point that should be made. If you can afford a $75,000 car (which is what I paid for mine) then you are not going to nit-pick at the $600 service fee or how much gas/battery cost. I bought the car because I wanted it not because it was going to save me money or the world. The car is a blast to drive. Buy it for that or simply do not buy it. I have never made money on a car purchase in my life and I don't think that is going to change any time soon.

In ICE terms:

Think of a battery as a mobile unrefined oil well, not gas tank. The battery has many cycles of recharging capability, essentially serving in place of a deep oil well that continuously pumps oil. But this oil is useless without charged electrons, just as oil is useless to a car until it is refined. When the battery is no longer useable, its like the oil well going dry and no more refined gas can be made.

Essentially, the reason you are paying 80k for an 85kWh Model S instead of $45-50k is because you are prepaying 30k for a mini oil well (the battery) where you will get/store energy for the next 8-12 years. The reason ICE car is cheaper is because you do not have to buy the oil well up front, just the refined gas. It would be like going to buy a car and the dealer said, "We calculated that you would consume X,XXX barrels of oil over the 8-12 year life of this car, so you need to buy this mini oil well along with the car for an extra $XX,XXX. A small nominal fee will be charged every-time you get the refined gas from your well.

A base model S without the 40kWh battery would cost around $32k without the battery. Think of a charge to the battery as refining the gasoline that sits in the ICE tank. The difference is we do not buy crude oil and refine it ourselves in our homes to be used in our gas tanks. The larger the kWh battery you buy, the bigger the oil well equivalent.

My own thoughts are when a network of batteries/chargers become available and you are not forced to buy the battery along with the car, but let larger companies manage the "electric oil well" (the battery) you will have a very economical car, cheaper than an ICE car, but the infrastructure is not there right now.

David;
Slightly OT, speaking of underbody corrosion, the casing of the battery is actually steel. I wonder if it will experience any corrosion in northern salt-spreading regions.

During my extensive Tesla search before ordering, I read somewhere that the Roadsters were getting about 3% degradation each year. I would hope that the MS would improve on that, but even if they didn't, 3% is a whole lot better than what most of the estimates above (search the forums and you'll see this referenced a number of times). Too, Tesla would not warrantee a battery for 8 years if they thought there was a real chance of the average live being less than that.

I agree that the higher end models are not the best "investment", but I would challenge those who state, "no one buying this car thinks they can actually save money". I've done an extensive analysis (time value of money, insurance cost difference, maintenance estimates, etc), but below is a simplified version of the more significant variables:

$57.5k (stripped down 40 kWh bought before the end of the year)
- 8.3k ($7,500 Federal Rebate + $750 Oregon Rebate)
+ $4k (10 years of owner ship * $400/year annual electricity cost)
- $19.5k (Trade-in assuming 1/3rd initial cost)
+$8,000 (Battery replacement, even though it should have about 75% capacity after 10 years)
________________________________________________________________
= $41.7 (my full assessment showed an annual cost of ownership to be about $5.8k)

Compared to:

$23.8 (stripped down Honda Accord which has many less features in the base model and is an inferior car)
- No Rebate
+ $19.6 (10 years of owner ship * $1,960/year annual gas & oil)
- $7.9k (Trade-in assuming 1/3rd initial cost)
+$3,000 (repairs over 10 years that are unique to ICE)
________________________________________________________________
= $38.5 (my full assessment showed an annual cost of about $5.3k)

Now the accord is no comparison to even the entry level MS. A BMW3 or Mustang GT has an annual cost of about $7.0k versus $6.7k for a 60 kWh model with $5k-$6k worth of upgrades (what I purchased).

Too, after purchasing the battery, you have another 8-10 years left which really makes the value proposition good.

I'm sure I will get slammed for this assessment, but my point is, the value proposition is a lot better than the original sticker price would make one believe and this IS one of the primary reasons I purchased my Model S.

@dortor "no one buying this car thinks they can actually save money"

Our situation...
Wife commutes approx 35k per year. She loves BMW, so every 3-4 years she gets a new one.

So costs..
BMW $50k + maint for 100k miles $5k
times 2 costs us $110k for 6.5 years of BMW's

I could break it down further, but her Tesla should put us even at about 5 years.

hsadler;
Even accounting fuel costs as the same! 35K x 5 worth of gasoline is gonna cost lots more than 35K of electric juice. Is her mpg in double digits? ;)

typo: 35K x 5 of electric ...
(That's 175K, for those who don't have their calculators handy.)

Just do what I did:

Step 1) convince yourself by whatever means necessary that the car will save you a few hundred dollars of gas a month

Step 2) Finalize your order

Step 3) Admit that there might not be much savings in gas or maintenance, and that the car may be worthless at the end of 8 years

Step 4) Be happy again knowing that you're probably not buying the car to save the world but because it's an insanely cool, fun car with lots of electronic toys, and despite the inconveiences, in some ways it's absurdly convenient; plus it's a car that really is different and you're helping to pave the way for a car that really will be a game changer down the road (whether it's Gen III or a non-Tesla car)

Step 5) Smile smugly

Sounds like you all missed the fine print on the contract. It reads the same as a video poker machine:
"User understands that use and ownership of this vehicle is for entertainment purposes only and understands that it requires a financial expenditure to enjoy. All costs and expenses are approximate and do not guarantee anything whatsoever".

I plan to drive it and see what happens, just like the rest of you. If I can keep the battery 10 years and get to where I want to go great! If I have to fork over more money to replace it in 3 years, after 100,000 miles, I will do that too.

I know at least one person commented on this, but I just want to add: we can't possibly know what a Model S replacement battery will cost in 8 years (or however long after that it actually lasts). But it is almost a guarantee that it will be much less than $12,000. Until recently, there has been little incentive to advance battery technology. In just the last couple of years, we now have lots of hybrid and all-electric cars on the road. Chances are that the numbers will grow very fast. The chicken and egg circle is being broken, and we will see some amazing advances in the following areas of battery technology:

time to charge
weight (energy density)
cost

and these are just a few. I am looking for companies that are in the business of advancing battery technology and investing there. Tesla is first on the list.

Just an aside, the guy who accidentally invented the super-soaker-squirt-gun is a research scientist. He has developed a wafer cooker size battery that is super light weight and literally one inch square with plenty of power. I do know that he sold it to Whamo for an undisclosed fortune and intended to use all that money to continue his research. I don't know what happened to him because that was a number of years ago but I expect many new achievements to come rapidly if Tesla can hang in there. I am very excited about this new wave of the future and I am certainly committed to the long haul.

Random comments on the above string: Battery technology will evolve. In 8 years you might be able to by more capacity for less money. There might even be aftermarket options, depending on how many of these things are on the road.

An 8 year old ICE is depreciating in ways other than value. There is no way an 8 year old ICE is making the same horsepower as it did the day it left the factory. The driver might not feel it, because it degrades over time. But it is losing power every year.

It is expensive and labor intensive to upgrade and ICE vehicle. Engine swaps and electronic upgrades are enormously expensive. Those two systems on MS are relatively easy to swap out or improve. MS therefore seems a better platform for supporting future improvements.

Tesla has unique opportunities regarding trade-ins. In 4 years when I want to trade in my 40 kwh car, they can easily upgrade it to an 85 (or beyond), slap a warranty on it and sell it. ICE manufacturers don't have that capability. They aren't going to drop the latest engine technology in a 4 year old car. They couldn't even if they wanted to.

My laptop and cell phone batteries are lasting a lot longer than they used to, and they don't have sophisticated heating and cooling systems keeping them at ideal temperatures.

If Roadster was experiencing significant battery degradation, we'd be hearing about it. There are more than enough haters out there to ferret out the bad news.

mspot;
A bit too too, there. Upgrading a 40 to an 85 doesn't fly, at least re the SC hardware. That needs a complete wiring rebuild. Cheaper to make a new car, probably. That said, large batteries with standard charging could be available.

Let's assume 1000 mile batteries will cost $2500 in 8 years (please adjust for inflation), assume that gas will be $10 a pint, that Tesla will continue to push out software updates and improve the efficiency of 2013 Model S cars by 10% annually, perhaps assign an arbitrary X factor to each equation (could be a positive or negative value because we can't know what will happen with taxes, resale values of 1st gen EVs or traditional ICEs in the future) and let's ignore the predictable and unpredictable costs of repairs to ICE vehicles with their thousands of moving parts and EVs with their 10s of moving parts. Now, can somebody get out their slip-stick and cypher that TCO? And could somebody tell me how much money I will have to spend to maintain my MS for the next 10 years? I can tell you I spent north of 8 grand on my 2003 CLK 500, not including those reasonably priced Mercedes service visits. I hope I don't have to pay somebody to take it away. This should be easy to figure out. Or, call Ms. Cleo at the psychic friends hotline. You can get back to us in 10 minutes @ $9.95 a minute. Meanwhile, I'll be driving my Tesla around with a big smile on my face and will be giving no thought to the costs, depreciation or anything other than how happy and smug I feel for being an early adopter and having the honor of being among the first to experience the unprecedented joy that flows from the accelerator, into my right foot, fills every fiber of my being and prevents my brain from contemplating these unfathomable, depressing notions. If the economies of your life depend on whether a Model S will save you a nickel or lose you a dollar, don't buy an $80k electric luxury car. Consider a second hand Prius, or a bicycle. If you have the money, buy the car, have fun, be the first in your neighborhood, blaze a trail, live it up. What is the going rate on euphoria? Whatever it is, in my opinion, it's worth it. Best car ever. Hope this was helpful.(YMMV)

Lush, you're besotted! Those endorphins have put you round the bend. These nice men in the white coats just want to help. Go with them quietly.

:D ;p |B-}

True. I'm off the rails. Those men in white will have to catch me first if they want to put me in a rubber room and I can out torque them in my Tesla. But I'm having fun and not yet putting a price on it. Maybe the infatuation will wear off someday and I'll start having regrets and counting the costs, or this could be true love, which is priceless. Time will tell. It's funny though, I never really calculated the true TCO of any car I owned in my life. It makes it so much harder to be in denial about the value of a vehicle when you actually crunch the numbers. Most of my cars probably were costing me far more than I really knew. It will be interesting to see how future battery technology develops and what range and life we can enjoy in 3, 5, 10 years. Tesla warrants the battery for 8 years. I hope their estimates are accurate. It would be a shame for them, and us, if they had to replace them all early. Hope their estimates are realistic. But semi-seriously, if you could upgrade/trade in your 85/60/40kw battery in maybe 5 years for one that could go, let's say 1000 miles, what would you be willing to pay? Would the impact on your TCO be a deal breaker or would the added range be worth it, even if your TCO exceeded that of a comparably priced ICE? You still would have a car with zero TPE, not to mention astonishing performance, a beautiful body and that amazing touchscreen. Sometimes being green costs more (can you say organic grocer?). Sorry that I've rambled off topic. I'm a creative type, not very pragmatic or technical, and this discussion has me wondering aloud about the future.

@ Lush1

LOL

Have fun with your Tesla Model S.

Driving a Tesla model S every day is priceless...

Before last Sunday, I was asking myself the question of cost since I put my reservation almost 4 years ago. I have my car for about a week now, and the car is a 1 million $ experience at least...
It's true that it seems expensive, but driving clean is also priceless.
Driving the first "true" 21st century car, is priceless. All the other are from the past. Living in the car of the future is priceless.

if we all drive ICE car, we even don't know if we will able to breathe in 20 year from now, the cost of ownership for these 20 years will be useless... Let's drive clean, and enjoy a marvelous car.

$0.03 per mile is completely unrealistic, at least with California (PG&E).

I posted elsewhere, but here's the real deal. We have a 4.8 kW solar system on our house, use the E-6 rate (time of day billing) but may change to E-9.

Our baseline electrical rate is $0.10 per kWh. BUT... my Model S sucks 20 miles of range just sitting in the driveway, and that alone consumes my baseline household electricity allocation of 7 kWh/day. That alone costs about $800 per year (to go nowhere).

My actual weighted average cost of electricity for the car is between $0.25 and $0.35 / kWh. I use about 350 Wh / mile driven, so that means that my operating costs are more like $0.08 to $0.12 per mile for electricity, which is 3-4 times what I "expected".

I have looked into getting a dedicated meter just for the Model S, which PG&E will do, but at my house it will be an expensive and elaborate installation so at the moment I'm not going to pursue that. But supposedly there will be a new EV rate available sometime in 2013 which will offer time of day billing without tiered pricing - so flat rate of about $0.11 / kWh if you charge after midnight. Of course that requires the Mobile App to support time of day charging, which it does not support right now.

It's still a great and amazing car, but much more expensive to operate than advertised... careful.

Interesting topic. If you are buying a MS for the batteries, you are overpaying.

Every car I have ever bought was essentially worthless after 10 years. If my MS is worth more than $0 after that time, I'll be ahead of the game.

I'm fairly certain that my Tesla grin will also still be around after 10 years, albeit with some slight degradation.

I agree about the cost/mile. Here in NJ elec costs about .20/kwh. I'm not that great at math, but I think if you get 350wh/mile in the MS, that comes out to about $.07/mile. An ICE getting 30 mpg like my hybrid costs about $.125/mile. So the MS will lower my energy per mile cost by not quite half. I don't even want to consider the cost of replacing the battery. I look at that as a donation to the environment.

Just an observation...

People make a lot of assumption, which can be a dangerous thing (noting that assumptions make an ASS out of U and ME).

The worst is that battery technology is going to make significant changes over the next decade. As far as assumptions go -- that a really bad one.

Contrary to Lush1's wishfull thinking, battery improvements have been very modest -- and it's not due to a lack of trying. http://batteryuniversity.com/learn/article/the_future_battery and http://gigaom.com/2010/10/06/want-moores-law-for-batteries-go-find-an-as... talk a bit about this. History says about 5 to 8 percent per year (maybe) -- which means a doubling of capability in 10 years. So our beloved 85KW Model S would be able to have a usable range of about 350 miles (see other threads that say the true safe number for the 85Kw is 177 miles in all conditions). Which, given todays lack of recharging infrastructe, means I still would need to keep my ICE :{

@riceguy -Definitely yes.
Cars are almost always bought in the order of:
Step 1) Decide what you like
step 2) Convince your self (and spouse) that it makes sense

That being the case my rough estimate is:
1) If Tesla goes out of business in 5 years or less, I'll be kicking myself.
2) If I keep the car >10 years, and Tesla is still around to support it, I'll be ecstatic. If I mange to make liberal use of free charging, this can shorten a year or two.

I'd never pay up front for the battery replacement option. It is a huge premium for locking in a guaranteed price. I prefer to wait and see what the real choices are when I need it. If batteries really improve anywhere near predictions, the current cells will be out of production by then.

@ tsx-%
No, it's exactly due to the lack of trying, which has changed an order of magnitude in recent years. Most conservative estimates now are for twice what you quote 10-15% improvement per year (without a game changing break thru which are a definite possibility); Then in your last assumption, you assume 10 years from now, we have 'todays lack of recharging infrastructure' - that's not even a remote possibility, much less the most likely scenario. All told I'd say you're off by a factor of 2 or 3;

Also, someone may have already mentioned this - I just scanned the thread; But OP, if your going to count an 8-10 year life part (car battery) into the equation for operational fuel costs, then you have to count a complete engine replace or rebuild for ICE over that same period (and likely much more- transmission, etc.)- the difference in EV is the motor will never wear out, only the battery.

I disagree with loading an 8-10 life part into the operational costs for this reason. Most people right-off 90% of any vehicle cost over that period with minimal residual value at that point. An EV on the other hand may well carry a much higher value than scrap- since replacing the battery (at a now lower cost) get's you a nearly new car or simply keep driving it at lower range. For example what is the actual life of the battery if 40-50% range is acceptable? Might be 20 years, more? What would an ICE car be doing in that same time period?
Also, in terms of stationary operating costs, keep in mind an ICE also bricks if you don't use it for a long period of time- you can't just let it sit for 2 years without engine damage.

Bottom line for me is, life's too short; I'm with Lush- enjoy the car for what it offers

kenliles,

I would love to see where you have seen an order of magnitude changes in battery capacity - please share!

Let see, using the same algoritm, can I make a reason not to buy a ICE car?

1. the cost of replacement of a motor and transmision is more the $12,000. The labor is expensive, you need a high skill mechanic that is expensive.
2. we know the warranty is 3 years 36000 miles. no manufacturer will give you 8 years warranty with unlimited miles.
3. we know the motor and transmission degrades over time.
4. eventually it will be worth while to replace the motor and transmission to get back to the vehicle's original capabilities.

No manufacturer is giving you free 4 gallons of gas every 200 miles. No parking garage will give you free gas with parking. NO gas station will give you 30% discount if you pump nights. And no employer will give you free gas...

You forget about the motor warranty...


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