EV haters get the xkcd treatment

[Alan]

Sadly, I'm also an engineer, thus I strongly suspect that when you factor in the cumulative depreciation costs of those seven EVs, your actual total cost of ownership might not be the slam dunk we both wish it were...

Speaking as another engineer...

EV depreciation used to be significantly accelerated by the $7500 tax credit that went to new buyers but not to resell buyers (except for a short while with a lesser amount, before both were killed). Depreciation is usually expressed as book value divided by MSRP before credits and other incentives. (Note that lease residuals are based on expected depreciation, but most manufacturers were not compensating for the tax credit impact, as they were mostly using the same depreciation schedules for both ICEs and EVs.) Now that the federal credits are gone, EV depreciation should track much closer to ICE depreciation, exactly as it has mostly done when it is calculated as book divided by actual original acquisition cost for both. The tracking should be even closer once battery recycling becomes widespread, as that will keep salvage values higher as well, as it does for recycled ICE engines and transmissions.

My BMW i3 had horrible depreciation, but much the same as most ICE BMWs. When the "lease" (a pseudo-lease) expired, the book value was 10K below residual, and the dealer let me buy the car at book (after I said I was turning it in, and he should call me once the car hit his resale lot!). I bought a Leaf SL+ to hold me over after my i3 self-destructed a year later until the Tesla Y was due out, but I didn't like it, and got the Mach-e instead. When the Mach-e "lease" (nearly identical pseudo-lease as BMW) expired, the book on my First Edition Mach-e was about $2K more than the residual, so I bought it at the residual. The book on non-First Editions '21s were all under water on the residuals, as expected, as the tax credit was still available to new car buyers.

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[Jerrytball]

There's a huge difference between hating EVs and not liking specific EV models. I think most of the people on this board, and even in this thread, are not what I would call EV haters.

Let me make my point or stand clear. I don’t have a Mustang anymore, but I enjoy being out here because I got to be friends with a lot of people out here and I like talking about and learning about electric vehicle vehicles. if I decide to get a different make or model it’s because I’m experimenting. I wanna learn on my own like many years ago. I’m not going to make the same mistake or miss I made back in the day buying a Chevy product. for me for me. The only Chevy products I cared for were back in the 60s and the only one under the GM umbrella was the Buick and that was either the Park Avenue or the LaSalle in the early 2000s late 90s. I learned that I was always dissatisfied thinking I’ll give him another chance. I’ll buy a Cadillac. I’ll get me a GM truck. I’ll get a Chevy truck then something that would always constantly go wrong with it and I decided I didn’t wanna buy a Chevy again or a GM. Then when I started looking at EV maybe I should look at a Chevy they got a good price. I looked at them. They don’t look bad but then I started thinking back to all the troubles I had with them and I said that’s not a good idea because I’ve always said I think Chevy‘s got an electrical problem and why would anybody buy an electric Chevy and here I was looking at one. I have to admit because I was a regular gas Mustang guy all my life. I didn’t think the electric Mustang was that good looking of a vehicle, but I decided to drive it and not look at the outside of it and when I drove it, it sold me and I kept it for about a year and I decided to go back to a gas vehicle, but I have nothing bad to say really about the car. I know it had its quirks, but I enjoyed it when I had it and no matter what color combination or configuration someone did to their vehicle I would never use any F words, mixing with the word, ugly, and almost sound very condescending whether they kept their car or like one of the well-known guys on here went to that new electric Kia GT when it first came out I think it was the EV nine or whatever and got rid of theirs. But if someone’s had a bad experience with it or just doesn’t like the way, the car looks, they don’t have to try to make the person buying it or looking into it feel like they’re stupid. They have no idea what they’re looking at. They have a awful taste in design. I mean I’ve always thought the front end of any BMW looked good. I always liked that kidney grill just like I like the Bugatti front end but an Alfa Romeo I don’t really care for the front end on that but like I said people buy these cars they buy different models and I’m like in person that’s different. Yeah it’s not what I like I like a little bit different here. I like a little bit different there, but I try not to get ugly about the conversation and a lot of that happens on here and I really don’t appreciate it and I don’t care if somebody reacts to that and says well we don’t care if you don’t appreciate it we’re gonna tell you that it’s ugly. Well that’s fine but it’s like somebody else will come into the conversation and say yeah I was looking at that that’s not a bad looking car this and that and then they’ll kind of attack that person later on like this world is screwed up enough right now and you know what to eat their own if somebody wants to remove my account since I don’t have a Mustang if there’s an administrator reading this cause I don’t think I can delete my own account. You’re welcome to delete it because like I said, I don’t own a Mustang no more but I like talking out here. I don’t like getting an arguments, but I’m not gonna let you talk down to me like I’m stupid that I don’t know what I’m looking at to tell you the truth from the side my neighbor parks is BMW X4. It almost looks just like a Mustang. It’s the same body shape and Ford list the Mustang as as an SUV someone sit on here one time it’s an SUV. That’s the way it’s supposed to look when talking about another model, but the Mustang is an SUV. It’s like I said if somebody wants to put down different auto makers go ahead . i’m all about trying something different a different look I don’t care who the CEO is. I have no idea who this person Otto is. If I bought things based on someone who runs a company I would never shop or go out. I don’t care if musk owns or is the CEO of Tesla I mean if I wanted to try that I might’ve but after looking at other things and reading all the reviews by car and driver I decided I didn’t want that Tesla so like I said an administrator wants to delete my account go ahead. I really don’t care. I’m not out here to fight but like I said it seems like there’s a few out here that just want to do that and I’m sometimes surprised to hear a lady talk like that.

 

[devmach-e]

Let me make my point or stand clear. I don’t have a Mustang anymore, but I enjoy being out here because I got to be friends with a lot of people out here and I like talking about and learning about electric vehicle vehicles. if I decide to get a different make or model it’s because I’m experimenting. I wanna learn on my own like many years ago. I’m not going to make the same mistake or miss I made back in the day buying a Chevy product. for me for me. The only Chevy products I cared for were back in the 60s and the only one under the GM umbrella was the Buick and that was either the Park Avenue or the LaSalle in the early 2000s late 90s. I learned that I was always dissatisfied thinking I’ll give him another chance. I’ll buy a Cadillac. I’ll get me a GM truck. I’ll get a Chevy truck then something that would always constantly go wrong with it and I decided I didn’t wanna buy a Chevy again or a GM. Then when I started looking at EV maybe I should look at a Chevy they got a good price. I looked at them. They don’t look bad but then I started thinking back to all the troubles I had with them and I said that’s not a good idea because I’ve always said I think Chevy‘s got an electrical problem and why would anybody buy an electric Chevy and here I was looking at one. I have to admit because I was a regular gas Mustang guy all my life. I didn’t think the electric Mustang was that good looking of a vehicle, but I decided to drive it and not look at the outside of it and when I drove it, it sold me and I kept it for about a year and I decided to go back to a gas vehicle, but I have nothing bad to say really about the car. I know it had its quirks, but I enjoyed it when I had it and no matter what color combination or configuration someone did to their vehicle I would never use any F words, mixing with the word, ugly, and almost sound very condescending whether they kept their car or like one of the well-known guys on here went to that new electric Kia GT when it first came out I think it was the EV nine or whatever and got rid of theirs. But if someone’s had a bad experience with it or just doesn’t like the way, the car looks, they don’t have to try to make the person buying it or looking into it feel like they’re stupid. They have no idea what they’re looking at. They have a awful taste in design. I mean I’ve always thought the front end of any BMW looked good. I always liked that kidney grill just like I like the Bugatti front end but an Alfa Romeo I don’t really care for the front end on that but like I said people buy these cars they buy different models and I’m like in person that’s different. Yeah it’s not what I like I like a little bit different here. I like a little bit different there, but I try not to get ugly about the conversation and a lot of that happens on here and I really don’t appreciate it and I don’t care if somebody reacts to that and says well we don’t care if you don’t appreciate it we’re gonna tell you that it’s ugly. Well that’s fine but it’s like somebody else will come into the conversation and say yeah I was looking at that that’s not a bad looking car this and that and then they’ll kind of attack that person later on like this world is screwed up enough right now and you know what to eat their own if somebody wants to remove my account since I don’t have a Mustang if there’s an administrator reading this cause I don’t think I can delete my own account. You’re welcome to delete it because like I said, I don’t own a Mustang no more but I like talking out here. I don’t like getting an arguments, but I’m not gonna let you talk down to me like I’m stupid that I don’t know what I’m looking at to tell you the truth from the side my neighbor parks is BMW X4. It almost looks just like a Mustang. It’s the same body shape and Ford list the Mustang as as an SUV someone sit on here one time it’s an SUV. That’s the way it’s supposed to look when talking about another model, but the Mustang is an SUV. It’s like I said if somebody wants to put down different auto makers go ahead . i’m all about trying something different a different look I don’t care who the CEO is. I have no idea who this person Otto is. If I bought things based on someone who runs a company I would never shop or go out. I don’t care if musk owns or is the CEO of Tesla I mean if I wanted to try that I might’ve but after looking at other things and reading all the reviews by car and driver I decided I didn’t want that Tesla so like I said an administrator wants to delete my account go ahead. I really don’t care. I’m not out here to fight but like I said it seems like there’s a few out here that just want to do that and I’m sometimes surprised to hear a lady talk like that.

Congratulations, you have described car culture for the last, oh, 100 or so years.

 

[Kamuelaflyer]

Let me make my point or stand clear.
<snip>

Jerry, you're reading way too much into people's comments. Try not to worry about such things so much. Buy what you like. If other people don't like your choices, that's not your problem. It's also why they make different cars.

 

[Ahlarict]

I don't care about depreciation. I leased all of them except the Ioniq (original). And that sold for $11K with a dead head end computer and blank screen.

<squints and cocks head>You do realize that in a lease, all you're paying for is the use of the car during its peak years of depreciation, right?

 

[cj_Jr]

<squints and cocks head>You do realize that in a lease, all you're paying for is the use of the car during its peak years of depreciation, right?

I understand that. I just don’t care that much about what the car is worth. I’m renting it for three years. Then I return it and get a new one. What it’s worth at that point is the dealer’s problem. I know I’m not coming out ahead. I just don’t care to spend all day doing calculations about residuals, TCO, etc.

 

[Alan]

<squints and cocks head>You do realize that in a lease, all you're paying for is the use of the car during its peak years of depreciation, right?

However, (and the reason I have leased twice now) a lease lets you put a limit on how much depreciation you will tolerate. If the actual depreciation leaves the residual greater than the book value, just turn it in and be thankful you didn't loose the entire amount of the depreciation. Also, if you decide you don't like the car, just turn it in. Or, if the residual is much less than book value, buy out the lease and either keep it, or sell it at a profit. Leases can offer interesting options in managing car ownership beyond paying a lot, owning nothing, but getting to drive a new vehicle every few years. The versatility of a lease made it easy for me to "experiment" owning my first EV by significantly limiting my risk.

Here is how I view a lease: The manufacturer guesstimates the depreciation of a vehicle, and they are usually pretty good at it, even though they often purposely fudge to better manage their inventory and such by playing with the residual and lease rates. They quote a lease factor, but it is equivalent to a normal loan interest rate with a constant conversion factor (that I don't remember of the top of my head). I view the lease as TWO loans, both at the same interest rate. The first one is for the lease period to pay the principal (depreciation down to the residual) and interest. The second loan is an interest-only loan to cover the residual. The monthly lease cost is the sum of these two loans.

Whenever a manufacturer (lease owner) offers a high residual and low interest rate, the lease can be very good for the purchaser, as the lease payment will be smaller and there is high likelihood a buyout below the residual can be easily negotiated at the end of the lease. Note a higher residual lowers the "first" loan part costs more than it raises the second interest-only loan part, lowering the total monthly payment. However, when the residual is too low and/or the loan-equivalent rate is too high (relative to available car loan rates on a straight purchase), then I will walk away from the lease.

 

[devmach-e]

I understand that. I just don’t care that much about what the car is worth. I’m renting it for three years. Then I return it and get a new one. What it’s worth at that point is the dealer’s problem. I know I’m not coming out ahead. I just don’t care to spend all day doing calculations about residuals, TCO, etc.

I own and I don't spend all day doing that stuff, either. I go into the purchase transaction knowing that I'm going to keep the car for a long time.

 

[RandyMache]

So, being sortof new to EVs, tell me how do you "go fetch some" electrons to top off your EV if you run out?

Call road side assistance as some have chargers. Or you can plug in just about anywhere.

 

[JoeDimwit]

I am coun

I think a read a study that actually measured the distributions of dwell time at gas stations. I know the average was more than 5 minutes but I can’t remember what it was. I actually think it might have been 6 minutes. I could google it…

ting more than just the dwell time. I am counting travel time between the route and the gas station too. Like, if you have to get off the expressway to get gas, I am counting everything between when you merge onto the exit until you merge back onto the expressway as an example.

 

[Kamuelaflyer]

I am coun

ting more than just the dwell time. I am counting travel time between the route and the gas station too. Like, if you have to get off the expressway to get gas, I am counting everything between when you merge onto the exit until you merge back onto the expressway as an example.

So what you're saying, Joe, is that you prefer apples-to-apples comparisons over apples-to-kumquats comparisons? How very logical and sensible.

 

[JoeDimwit]

It’s

So what you're saying, Joe, is that you prefer apples-to-apples comparisons over apples-to-kumquats comparisons? How very logical and sensible.

like people that never drive more than 27 miles in any single day demanding that they NEED a vehicle that has the ability to go 1,000 between refueling stops. People overestimate their needs, and when it comes to fueling stops, they heavily discount the true time involved.

 

[Mach1E]

They are also constantly talking about the life of the battery. "What do you do in ten years when your battery fails and needs replacing?!?" They say it like ICE cars have no issues. To wit, I sold my last ICE car, a 6 yo BMW X3 with 90K miles on it, because I took it in for new tires and it needed $13,000 worth of repairs on components EVs don't even have. It was worth $11,000 so I sold it and bought my MME. This is my 7th electric car. I've had BMW i3s, Ford C-Max, Hyundai Ioniq and Ioniq 5. Never had a service call that cost more than $1,000 (and that was for new tires!) Never replaced a battery.

The ignorance from the reactionaries is exhausting.

It’s usually not the frequency of events that scare people, it’s the intensity of the event.

People worry about the life of the HVB because it can cost $30-50k to replace in the event it dies out of warranty. Thats way more than your $13k example, even with German automotive prices.

Car will go to the junkyard when that happens.

It’s why you can buy used Tesla Model S’ for under $10k and a used Nissan Leaf for $3k. They’re throwaways when they break.

 

[Gloff]

<squints and cocks head>You do realize that in a lease, all you're paying for is the use of the car during its peak years of depreciation, right?

Every lease stands on it's own, not every lease is a loser, and not every lease is a winner. Leasing allows a lot of flexibility and limits risk. It's a hedge in a lot of ways. Other times, like when Mach E Premiums were 60k with 55% residuals and massive lease rebates, it's a no brainer.

Some financial nerds view leasing as an essential tool for many products. Some prefer the old world, never borrow thought line.

In my view, everything already has the cost/arbitrage baked in, if you're not using your leverage, you're overpaying. Why pay with a debit card or cash when you can borrow the money for 30 days interest free and get cash back?

There's a reason highline brands have high lease penetrations, it's not because their clients are idiots.

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