The logical way to evaluate an EV

Keith Tanner said:

I wonder how much of that Bolt price drop is due to changes in spec and or decrease in battery costs? And how much is the usual Big Three pricing strategy of setting a high MSRP and then bargaining down - comparing selling price vs MSRP will always give a bad comparison in a market where there is constantly $10k on the hood of an F150.

It's hard to evaluate how the Tesla depreciation has been, as the Model 3s showed up shortly before the market went into anomalous mode. Bolts and Model S are probably the only ones we have to go off, and the Model S resale probably suffered from the Model 3. We may have to wait a few more years for things to settle down to see how EVs hold their value in the long term.

And I think you missed 2 big ones regarding Bolt pricing.  First the $7500 incentive. As a salesman I know the anticipation of reward is greater than fear of loss.
     Second the Average Chevy dealer wanted nothing to do with EV's.   If one was traded in, it went to auction.  Driving the price lower and lower. 
    In fact most Chevy dealers only wanted to sell pickups and Corvettes. Some even traded their Corvettes for pickups.  Cars were money losers for them.  That's why a few years ago  they wanted to stop building cars. 

ProDarwin said:

Thats a unique case, but 1G leafs did not age well either. 

A lot of the early EVs were "compliance vehicles".  The law said the manufacturers had to sell a certain percentage of EVs but they weren't really ready for it.  So they made vehicles that cost as little as possible to build (but still quite a bit), had relatively high MSRPs, and then leased them through in-house financing with artificially inflated residual values.  That made for a nice low monthly payment so that people would buy what were in reality pretty crappy cars, and pushed the financial losses off to somewhere else on the spreadsheet.  Depreciation on those cars was brutal.

That particular practice seems to be mostly over now, and I would expect resale on things like E-trons, Mach-Es, Lightnings, etc to be closer to Teslas than the Fiat 500e and 1st gen Leaf.

A problem with Bolt deprecation is the fact that they are all a fire risk and all subject to recall so while that nets you a new battery in the end you might end up with a burned down car, house, etc in the meantime. They're not exactly flying off the shelf due to that.

Also, while the Bolt isn't based on another car, it's still a Chevy and they are not known for their good depreciation. Well, unless you're a buyer of used ones. How much does a Cruze or whatever other small hatchback they have depreciate?

I think ProDarwin was referring to new prices, not depreciated. $20k for a new one off the lot, but with an MSRP of $35k+. If that was including the $7500 rebate, there's half of the difference between MSRP and selling price right there.

The recall has thrown a bunch of noise into the Bolt resale data, unfortunately. I expect them to rebound pretty hard when the battery replacements start rolling out.

I expect they will also.  I think unfortunately that wont be quickly resolved.  Or else I would snag one and sit on it (parked at a safe distance) until it got a new battery.

Still I'm more concerned with depreciation beyond the 100k mile mark.  Many ICE vehicles still retain a reasonable amount of value there.  With EVs there is still the risk (percieved or otherwise) of a battery failure totaling the car much earlier than an ICE failure would total that vehicle.  But as battery costs drop, this is less and less of an issue.  A quick google shows $137/kwh average cost in 2020, so a replacement battery for a Bolt works out to a bit over $9000, so we are probably approaching parity there.

You also have to throw in any home charging conversion charges, mostly one time only of course.  If you want to go 220v (probably highly recommended) you may need to do some work, and pay for a charger I suspect.  I have no idea what those costs are.

Re: maintenance - I want to see the new BMW i4 on the road. A new 4 series with great performance that will not require a new cooling system and valve cleaning every 4 years. 

Keith Tanner said:

I think ProDarwin was referring to new prices, not depreciated. $20k for a new one off the lot, but with an MSRP of $35k+. If that was including the $7500 rebate, there's half of the difference between MSRP and selling price right there.

The recall has thrown a bunch of noise into the Bolt resale data, unfortunately. I expect them to rebound pretty hard when the battery replacements start rolling out.

Are we talking about Bolt. Or Volt?  

GTwannaB said:

Re: maintenance - I want to see the new BMW i4 on the road. A new 4 series with great performance that will not require a new cooling system and valve cleaning every 4 years. 

Seems like every manufacturer is going to be flooding into the EV market now.   
   I wonder if their EV's will have the same features, traits, and shortcomings as their ICE versions.     

aircooled said:

You also have to throw in any home charging conversion charges, mostly one time only of course.  If you want to go 220v (probably highly recommended) you may need to do some work, and pay for a charger I suspect.  I have no idea what those costs are.

Great point.  I assume most serious car guys know how to do basic wiring.  Sort of  need to in order to get lights and do welding.  I probably already have most of what's needed but Home Depot is open until 9:00.  

ProDarwin said:

I expect they will also.  I think unfortunately that wont be quickly resolved.  Or else I would snag one and sit on it (parked at a safe distance) until it got a new battery.

 

 

Still I'm more concerned with depreciation beyond the 100k mile mark.  Many ICE vehicles still retain a reasonable amount of value there.  With EVs there is still the risk (percieved or otherwise) of a battery failure totaling the car much earlier than an ICE failure would total that vehicle.  But as battery costs drop, this is less and less of an issue.  A quick google shows $137/kwh average cost in 2020, so a replacement battery for a Bolt works out to a bit over $9000, so we are probably approaching parity there.

OK you're afraid they won't last past 100,000 miles?   Have you googled Tesla's Taxi fleet ?   I understand some in Europe have even higher mileage.   

Analysis has already been done on this.  It's always cheaper and more economically viable, and better for the environment to buy and repair a used old car.  No one really wants the hassle of that though, so there is the issue.  It's a convenience and "feel good" thing.  EVs still require massive numbers of barrels of oil and movement of earth to build.  To be honest, I don't really care what people buy; get what you like.  I just find the attempts to justify the choice a bit too much.  It's like trying to explain how windmills are going to save the planet and denying the number of barrels of oil it takes to build them and they burying the busted blades in the dirt and ignoring that too. 

Now if you argued EVs will reduce smog and make living in more crowded cities have better air quality, then you would have a legitimate point.  No one ever bases their decision on this though. 

In reply to AnthonyGS (Forum Supporter) :

I'm not sure there was one environmental comment in this whole thread. I believe the discussion was about cost of ownership. 

frenchyd said:

Keith Tanner said:

I think ProDarwin was referring to new prices, not depreciated. $20k for a new one off the lot, but with an MSRP of $35k+. If that was including the $7500 rebate, there's half of the difference between MSRP and selling price right there.

The recall has thrown a bunch of noise into the Bolt resale data, unfortunately. I expect them to rebound pretty hard when the battery replacements start rolling out.

Are we talking about Bolt. Or Volt?  

Bolt. The one with no gas cap and an unfortunate risk of self-immolation. 

AnthonyGS (Forum Supporter) said:

It's always cheaper and more economically viable. . . to buy and repair a used old car. 

I won't get into the environmental thing because I doubt any of us on this board are actually qualified to do that level of cradle to grave emissions analysis.

But financially, that's not true for total cost of ownership. I have replaced two used old cars with 2 new or nearly new EVs, and both times it's turned out to be a net cost benefit. You have to remember that gas is expensive, maintenance on an old car is expensive, and that doesn't even get into the time cost of gas stations, doing oil changes, repairing your old used car.

Example: My old Mazda5 used $1700 in gasoline alone in a given year. The yearly electricity cost for my Leaf was about $200. Repairs and maintenance on an older high mileage car gas-powered like mine - yearly average was between $1000-2000. On the Leaf it was it was $0. So with purchase price and everything, the Leaf cost about $280 a month to lease and own. My already-owned-outright Mazda5, including expected repairs, depreciation, and gas? Monthly cost $339.

The best value proposition out there right now, even compared to a used ICE vehicle you already own, is a lightly used EV, or a Lease depending on what deals are available. 

I can at least speak to the Bolt situation as I'm not only an owner of a 2020 model, but on the various Bolt FB groups.

Bolts came down to $20-25k in 2020 not due to the $7500 tax credit. That had already gone away by that point, but by the fact that battery prices had dropped considerably, so they could still actually make a profit on a $25k car. When I bought mine, there was no tax credit left. Just like for Teslas.

Bolts have really strong resale these days, with a lot of people buying them even used (well for a bit there, they had to as new ones were on a stop sale). Even mine could be sold for as much as I paid for it in February of 2020. Many dealers did dislike selling them, but many did not (the dealer I bought mine from tended to have 20-30 on the lot at any given time and they flowed out of there like water so many people were buying them).  During the new Bolt stop sale a lot of dealers were offering good money for used Bolts to sell. And now that the batteries are being fixed, and all the ones that are getting new batteries are getting the latest, larger packs AND come with a new 8 year 100k mile (from the time of installation) warranty, the demand is actually going UP.

There were a number of early Bolts (2017 and 2018) with well over 100k miles and showing little to no battery degradation.

As for the claim above of a new EV being worse for the environment than a used car that's already paid off, that's not as true as you might think. The math works out that with a car like the Bolt, the time frame it takes for the EV to be cleaner than a used gas car you already own (like say an S2000) is about 3 years, after which the EV is cleaner and getting even more clean all the time, even with the power coming from coal (which is only 20% of the electrical generation mix these days). And as the grid gets cleaner, so do even the USED EVs.

And an older video on the same subject:

But as GRM members here, one of the key factors in EV ownership is how fun they can be to drive. Even the lowly Bolt is equivalent to a hot hatch in many respects (power, size, layout, and with good tires, handling). With the reduction on fuel costs, no change in insurance costs, and reduction in maintenance costs, along with the environmental factors AND fun to drive factors, I'm never going back to ICE for daily use.

frenchyd said:

STM317 said:

EVs are neat, but I think you're overstating some of the benefits here if we're being completely honest. EVs are WAY cleaner and more convenient than ICEs if you can charge at home and/or work. Over hundreds of thousands of miles though, I'm not sure they're likely to be significantly cheaper when compared to similar ICE models. And it could be worse if people go from driving relatively efficient ICEs to huge EV tanks because they think there's no downside to an EV.

How much do you drive that you're spending $70/mo on oil changes? That's $840/yr! Oil changes at my local dealer are about $50 these days, which would be about 17 oil changes for your annual $840 cost. If they're 5k miles in between changes, that's 85k miles per year. For a normal person that drives a normal vehicle about 13k annually, it's 2-3 oil changes each year which should cost much less than $70/mo. You're talking about $150 annually instead of $840 that most people would need to budget for oil changes per vehicle. That's $12.50/month.

 

Regen is cool, but EV brakes need servicing too, especially in rust prone areas. Tesla says calipers need to be cleaned and lubed every year or 12500 miles.

It cost C&D about $145 per brake service on their long term Model 3, and they replaced tires more frequently than a comparable ICE at $1k+ per set.

 

Public charging is often pretty similar to fuel prices, so you really only see consistent financial benefit if you can charge at home or work. However, states charging higher registration fees for EVs (to offset no fuel taxes) mostly cancel out any fuel savings from charging at home too:

I think at least in my state, the chance  of a EV fee added is  pretty slim given the politics of the state. 
 Realize at 18.9 per gallon Minnesota is in the lower gas tax area. So there is added room there to meet highway needs.  Plus as a net exporter of electricity the pressure wouldn't be there to  convince even fiscally conservative politicians  to add that tax. 
    We are a state with no smog inspections, and pretty modest  license costs. 
 

As far as I can tell, MN has charged a $75 annual fee for EVs since 2018

The federal gas tax is 18.3 cents per gallon in each state. It appears that MN has an additional $0.286/gal tax on gasoline:

So, if your state doesn't have any registration fee for an EV, the EV owner is avoiding paying $0.469/gal in taxes which amounts to a few hundred dollars per year that the government is essentially subsidizing EV owners. If there is a fee for EVs (and it seems like there is in MN) then more math is involved.

An average driver does 13k miles annually in the US. If that average driver gets 20mpg, they'd use 650 gallons of fuel annually and pay $304 in fuel taxes. If they get 30mpg, they'd use 433.33 gallons and pay $203 in taxes. If they get 40mpg, they'd use 325 gal and pay $152 in taxes. So an EV driver in MN pays hundreds of dollars per year less in taxes than a similar ICE driver, even with the $75 annual fee.

If you're a government, and want to incentivize driving an EV, subsidizing EV ownership through tax credits at the time of purchase, and/or lower fees/taxes during ownership is a great way to do that. But since EVs tend to be more expensive for now, it also amounts to wealthy people not paying their fair share of road taxes too.

So yeah, EV ownership certainly can be a great deal cheaper than ICE ownership, but a huge factor in that math is how much EVs are subsidized by the governments in your location. If you take away any tax credits at the time of purchase, and then ask EV owners to pay their fair share for road use (or more in some states) then the financial gap between an EV and an ICE gets a lot tighter and comes down almost entirely to how cheaply you can charge and what gasoline prices happen to be at any given time in your area.

Chris_V said:

Bolts came down to $20-25k in 2020 not due to the $7500 tax credit. That had already gone away by that point, but by the fact that battery prices had dropped considerably, so they could still actually make a profit on a $25k car. 

Yep. GM was paying $145/kwh when the Bolt was released, and losing money on every one they sold. Now costs are around $100/kwh. It's also why they didn't really try to sell very many Bolts, and why they're now beginning to offer EVs in body styles that people actually want.

For 2022 the Bolt saw a $5500 price drop for the same range

That instantly makes 2021 Bolts worth about $5500 less doesn't it? That's where the depreciation comes in.

STM317 said:

frenchyd said:

STM317 said:

EVs are neat, but I think you're overstating some of the benefits here if we're being completely honest. EVs are WAY cleaner and more convenient than ICEs if you can charge at home and/or work. Over hundreds of thousands of miles though, I'm not sure they're likely to be significantly cheaper when compared to similar ICE models. And it could be worse if people go from driving relatively efficient ICEs to huge EV tanks because they think there's no downside to an EV.

How much do you drive that you're spending $70/mo on oil changes? That's $840/yr! Oil changes at my local dealer are about $50 these days, which would be about 17 oil changes for your annual $840 cost. If they're 5k miles in between changes, that's 85k miles per year. For a normal person that drives a normal vehicle about 13k annually, it's 2-3 oil changes each year which should cost much less than $70/mo. You're talking about $150 annually instead of $840 that most people would need to budget for oil changes per vehicle. That's $12.50/month.

 

Regen is cool, but EV brakes need servicing too, especially in rust prone areas. Tesla says calipers need to be cleaned and lubed every year or 12500 miles.

It cost C&D about $145 per brake service on their long term Model 3, and they replaced tires more frequently than a comparable ICE at $1k+ per set.

 

Public charging is often pretty similar to fuel prices, so you really only see consistent financial benefit if you can charge at home or work. However, states charging higher registration fees for EVs (to offset no fuel taxes) mostly cancel out any fuel savings from charging at home too:

I think at least in my state, the chance  of a EV fee added is  pretty slim given the politics of the state. 
 Realize at 18.9 per gallon Minnesota is in the lower gas tax area. So there is added room there to meet highway needs.  Plus as a net exporter of electricity the pressure wouldn't be there to  convince even fiscally conservative politicians  to add that tax. 
    We are a state with no smog inspections, and pretty modest  license costs. 
 

As far as I can tell, MN has charged a $75 annual fee for EVs since 2018

The federal gas tax is 18.3 cents per gallon in each state. It appears that MN has an additional $0.286/gal tax on gasoline:

So, if your state doesn't have any registration fee for an EV, the EV owner is avoiding paying $0.469/gal in taxes which amounts to a few hundred dollars per year that the government is essentially subsidizing EV owners. If there is a fee for EVs (and it seems like there is in MN) then more math is involved.

An average driver does 13k miles annually in the US. If that average driver gets 20mpg, they'd use 650 gallons of fuel annually and pay $304 in fuel taxes. If they get 30mpg, they'd use 433.33 gallons and pay $203 in taxes. If they get 40mpg, they'd use 325 gal and pay $152 in taxes. So an EV driver in MN pays hundreds of dollars per year less in taxes than a similar ICE driver, even with the $75 annual fee.

If you're a government, and want to incentivize driving an EV, subsidizing EV ownership through tax credits at the time of purchase, and/or lower fees/taxes during ownership is a great way to do that. But since EVs tend to be more expensive for now, it also amounts to wealthy people not paying their fair share of road taxes too.

So yeah, EV ownership certainly can be a great deal cheaper than ICE ownership, but a huge factor in that math is how much EVs are subsidized by the governments in your location. If you take away any tax credits at the time of purchase, and then ask EV owners to pay their fair share for road use (or more in some states) then the financial gap between an EV and an ICE gets a lot tighter and comes down almost entirely to how cheaply you can charge and what gasoline prices happen to be at any given time in your area.

We are skating dangerously close to politics on this subject.  So like a politician I'm going to tell the truth••• tactfully. Leaving out what is political.   
        Not trying to mislead here, just making my points without offending.  
     The wealthy always get tax breaks. Because they have the money to "convince" politicians to do things their way.  
   If it takes giving incentives to the wealthy to achieve goals that are good for the population at large then that actually is something that should be done.  
    The poor and young starting families  can't afford to buy enough  new EV's  to make it a viable for major manufacturers  to build them.  I hate the term trickle down but that applies. The poor will have to drive the used ICE's until  EV's  become affordable.   So us upper income earners get a undeserved tax break for the greater good.  
      Socially it's wrong.  Every person should get a fair deal from the government. However there isn't enough for the government to do everything it should. 
     

In reply to frenchyd :

The optics aren't exactly great, but I don't disagree for the most part. I don't think it's necessarily political to suggest that the only ways any government can really influence behavior is by taxing/penalizing behaviors you want to discourage and subsidizing behavior you want to encourage.

My larger point was that EVs aren't always a financial slam dunk without various subsidies. Without subsidies, they shift a lot of costs around, or reduce them a bit but don't completely eliminate them.

And it's worth mentioning that a large part of why ICEs can be very cost competitive is thanks to decades of subsidizing them too.

STM317 said:

Chris_V said:

Bolts came down to $20-25k in 2020 not due to the $7500 tax credit. That had already gone away by that point, but by the fact that battery prices had dropped considerably, so they could still actually make a profit on a $25k car. 

Yep. GM was paying $145/kwh when the Bolt was released, and losing money on every one they sold. Now costs are around $100/kwh. It's also why they didn't really try to sell very many Bolts, and why they're now beginning to offer EVs in body styles that people actually want.

For 2022 the Bolt saw a $5500 price drop for the same range

That instantly makes 2021 Bolts worth about $5500 less doesn't it? That's where the depreciation comes in.

They may be worth less, but they cost less to begin with, so it's a wash for depreciation. Like my car, it cost $14k under MSRP, so the depreciation starts from that point, not from what the cars were selling for initially in 2017 or from MSRP. My car is 2 years old, but could be sold for almost as much as it's original purchase cost, so depreciation in real world terms is minimal.

Even now, 2017s with the new battery are already selling for $20k, which is about what a new 2020-2021 LT was able to be bought for. Crazy market. Though part of the crazy is in the used car market in general. GM and LG have no problems making the new batteries for the cars under recall and for new ones, but can't actually MAKE many new ones due to the other supply constraints, so used ones are still getting premium money. And as more people find out about the realities of owning them, more people are jumping on the Bolt bandwagon (at least according to the new members streaming in on the Bolt FB groups).

In reply to Chris_V :

I'm sure this is true across all used cars right now, but it's really shocking how much more used EVs are worth than they were in, say, February this year. We're talking an appreciation in many cases of 30-40% over the last 9 months. You could buy a Bolt for well under $15k used when I was looking earlier this year. That's definitely no longer the case.

aircooled said:

You also have to throw in any home charging conversion charges, mostly one time only of course.  If you want to go 220v (probably highly recommended) you may need to do some work, and pay for a charger I suspect.  I have no idea what those costs are.

I bought the Tesla fast charger for 550 and had 250 in a buddy wiring it up.  In retrospect I would have just run the 220 and charged slower (25mph vs 45mph) as it would still be more than adequate.

That was the math I did, I couldn't come up with a scenario where the faster charging speed was actually worthwhile. Having the car fully charged at midnight vs 3 am makes no difference to me. However, if I were on time of day metering and wanted to make sure the car charged during the least expensive window, it could be worthwhile. So we just use the "travel" charger that came with the car.

I wired up my own 220v outlet and the panel is right beside my parking spot, so all it cost me was the cost of the receptacle and a new fuse for the panel. So there's an $800 spread in what it costs to add a charger for home!

In our case I'm glad we sprung for the faster unit as now we have two plug-in vehicles and it makes charging both easy. 

Local electricians here charge upwards of $1500 to install one, and the units cost $200-600, so the price can vary a lot depending on how handy you are.