Slashdot Mirror
Tesla Motors Repays $465M Government Loan 9 Years Early
Tesla Motors announced today it has completely repaid the $465 million loan from the U.S. Department of Energy the company received in 2010. The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars. The stock price had risen sharply after the company reported its first profitable quarter (and the stock still sits roughly 50% higher than before their earnings release). Today's payment of $451.8 million finished off both the loan's principal and its interest, nine years before the final payment was due. Tesla CEO Elon Musk said, 'I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate. I hope we did you proud.'
Finally!
Good job!
So, when do they start making a car that I can afford to drive?
Electric cars will lead to nipples and other unamerican things.
I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.
Bravo to Tesla, and let's hope the current trend continues. The US really could use some new blood in the automotive industry.
There's no market for electric cars. - Oil companies CEOs.
Get free satoshi (Bitcoin) and Dogecoins
How is the government supposed to make interest on the loan if they repay it early?
I could afford one...
Si vis pacem, para bellum! For evil to succeed good men need only do nothing!
from either Rush Limbaugh or the New York Times on this one.
At least there's one person that understands where our government gets their money and that it doesn't just grow on trees.
The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars.
This is a case of robbing Peter ... I mean, suckers to pay Paul.
.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.
File under 'M' for 'Manic ranting'
Last quarter they made $11 million, the first time they turned a profit. However, they just raised $1 bn. and have a $10 bn. market cap according to google finance. I hope this isn't a Pets.com. Even if the company is viable, $10 bn. market cap means they need to get to the scale of almost a million car sales per year relatively quickly (unless they are just way more profitable than the Japanese and the big three.
This is exactly what the horse and buggy industry said when the first cars came on the road. "Ha! Petrol! Where do they think they will get it, once on the road?" and "People already have horses - who's going to want to buy an automobile when the buggy is so much cheaper??"
I'd like an electric car. The one thing about living in Quebec is relatively affordable hydroelectricity. However I wonder how an electric car will fare in winter when 33% of the battery will go to heating. At least that's the number they mentionned for the electric buses they're trying in Laval, you have to almost cut the summer range in half for winter. The motors work harder too to cut across snow.
Mostly random stuff.
.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.
Gas cars where like this once. The market tends to regular itself, even if it takes some time. Unless the government fucks it up, specially the USPO. Lets just hope that is not the case.
morcego
I think history has proven this again and again I believe that the technology for electric cars for everyone is not quite there yet, so focusing on the luxury market segment they can generate enough demand to have the possibility to actually work on this technology and, eventually, drive the prices down.
It's the same thing that happened with smartphones and other technologies, once the acutal product is there and proves to be profitable, technology advances much more strongly in that direction, helping to drive prices down and get more customers and markets.
The margins are much higher on a luxury car. It makes sense for them to target luxury vehicles initially, as early adopters are likely to be more affluent. If they started with a $30,000 car they wouldn't be able to keep up with the initial demand anyway. With their new-found piles of money, they'll be able to focus their efforts more on the mass market.
While I think it's awesome that they did this, and it sends a powerful message, there seems to be another implied flaw in the plan...
Perhaps the idea of the gub'mint giving them this loan was that it was to offset their startup/r&d/production costs in the early years before they were able to get to full on mass production (I mean large scale, like the level of other established & successful auto manufacturers). So much that with that offset, they would have been able to offer their vehicles to the public at "mass production prices" even though they weren't at that point yet. Doing this would have made their volume much higher, and thus they could have attained actual "mass production" levels quicker, at which point they operate cheaper, and thus make higher margins required to pay back the loan at (or closer to) the original term.
So in this scenario everyone wins...
1) The customer pays less
2) The company makes more sales and better establishes their brand & product with a larger market share
3) The government earns more $ on loan interest
But instead...
1) The early adopters paid more, subsidizing an early loan repayment
2) The company has less market penetration due to high prices
3) The government misses out on over half the interest revenue
But still, I can't blame them for wanting to eliminate what was probably the largest liability on their books.
You know, it wasn't until the Ford Model T that automobiles in general were considered affordable, that was in 1908. The first gasoline powered auto dates to about 1885. That is 23 years between the availability of gasoline cars and the affordability of gasoline cars. Why would you think that it would be different for modern electric cars? Give it a little time.
As mentioned elsewhere, the technologies developed by Tesla are being licensed to pretty much everyone who makes vehicles with electric/hybrid drives. You may not buy a Tesla, but if you by a hybrid or EV you're buying a car that was created in part by Tesla's research and development.
I'm guessing that Tesla saw the high end, high profit, low volume market was their best opportunity to make money selling their cutting edge, brand-new-tech cars.
The Model S is comparable in purchase price to an otherwise equivalent gas-powered car. It's a large, high performance luxury sedan, and other cars of that size, horsepower, and trim level run $75 - $100k as well.
This
Actually, battery-powered cars sort of dominated the automobile industry at first. Nobody seems to realize this.
.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.
BMW, Audi, Merc., etc., sell plenty of vehicles in the same price range. Tesla doesn't have to "save the world" themselves, they just have to raise the bar and show others that it's possible (and make a profit doing so). Others will follow.
I purchased a car recently, and purchase price was not my concern. Total cost of ownership, convenience were my concern.
Indeed... and it wasn't until the price actually *DID* come down that people really started buying them in any quantity.
File under 'M' for 'Manic ranting'
In case anyone wants to read some of those "insightful comments" from 2010: http://news.slashdot.org/story/09/06/24/1947208/Tesla-Nabs-465M-Government-Loan-To-Build-Model-S
http://money.cnn.com/2013/05/20/autos/telsa-car-dealers/index.html
I especially take offense with this argument:
"When manufacturers discontinue a brand -- such as Pontiac, Mercury, Oldsmobile or Saturn -- auto dealers still remain to help the customer,"
In reality, if Tesla were to go out of business, individual mechanics would open shop assuming there was a business demand. If there wasn't any demand, then it wouldn't matter if the sale originally involved a dealer or not. (Unless said former-dealer was unclear on the concept of business.)
You stereotypers are all the same...
"help the customer". Whenever I take my car to the dealer they always help them selves to my wallet, that's for sure.
The taxpayers of the United States thank you, Tesla, and Elon Musk in particular. Do you, by any chance, know someone from GM that we can talk to about repayment of their debt?
http://www.fool.com/investing/general/2013/05/19/how-much-gm-truly-stole-from-american-taxpayers.aspx
Keep in mind they didn't repay the loan out of revenue - they refinanced. (I.E. they sold bonds to repay the government loan.)
Let's not count our chickens before they're hatched - Tesla is still saddled with over half a billion dollars in debt from this bond issue alone, and not so much currently in the way of income to cover that debt. They're a very long way from being in the black.
Do you believe that is true for all new technologies which don't provide 100% of the benefits of the former technology at a lower cost? I don't believe that's true. That wouldn't comport with my experiences with new technologies.
Also, much money has been made by selling status symbols.
I especially take offense with this argument:
"When manufacturers discontinue a brand -- such as Pontiac, Mercury, Oldsmobile or Saturn -- auto dealers still remain to help the customer,"
In reality, if Tesla were to go out of business, individual mechanics would open shop assuming there was a business demand. If there wasn't any demand, then it wouldn't matter if the sale originally involved a dealer or not. (Unless said former-dealer was unclear on the concept of business.)
Exactly. The dealer model hasn't exactly helped Fisker any - while all the dealers remain, they all want exorbitant amounts of money to do any work on the vehicle. And an independent group has surfaced offering support for the vehicles regardless - but of course, you still have to pay.
Now you have the result of owners having paid thousands more because of the extra middle man - and certainly the extra middle man didn't help Fisker's profitability any, either.
That argument is equally flawed as Pontiac, Mercury, Oldsmobile and Saturn were nameplates of larger parent companies. For that matter, the first three had fleets of cars that were merely rebadges and varied trim levels of the parent companies vehicles. Tesla only has one badge, one brand. If they closed shop tomorrow, that would be that. Sort of like when American Motors closed shop. Or Daewoo. You don't see either of those dealers still open.
This is nothing more than State senates trying to give the wealthy citizens of their state an opportunity to muscle in and make a profit off Tesla selling cars. And Federal Interstate Trade laws should trump this. Otherwise, what is to stop a State from closing Disney Stores, or American Eagle, or Apple Stores... ... ohhhhhhhhhhhhhhh nevermind... these laws are AWESOME!!!
Oh oh let me play this game too!!!!!!
Maybe in this scenario everyone wins
1) Telsa has already started work on the cheaper mass production vehicles
2) Getting rid of a government loan gives Tesla then chance to get more investment dollars instead of repaying loan dollars
3) Getting rid of the government loan early gives them greater public standing thereby earning more trust in the company which allows them to sell more vehicles
but instead ..... Don't repay the early loan when the company can easily afford it
1) fiscial responsibility as a company earns a well deserved downturn leading to a lack of investment dollars and further loans at later dates
2) the company loses out on an very rare opportunity to gain greater public standing across the nation because the public generally loves tax invested dollars being repaid early particularly when it is such a signifigant amount
3) the gubermint who lent the money in the first place can get greater interest by now lending it to another company at the same if not better for the gubermint terms ( you know the other 83% of the companies given money under this program still around ) because "Hey the program is working, we lend money it get's repaid with interest"
If Tesla could not easily afford to pay off this loan much of my arguement goes away ..... but that is not the case for Tesla and this particular situation.
To conclude drcheap your name fits well the adage "Penny wise and pound foolish" since your arguements want to make a loan repayment penny for the gubermint not make a pound for the company which later on pays a penny more in taxes, oh and then pays another penny a year later, and another penny the year after that ....
Oh and in case you aren't aware a penny in taxes is better than a penny in loan repayment because the government gets given a penny in revenue whereas they have to loan the money out in the other case in hopes it will come back.
They should be thanking China for buying our treasury bonds - all of the stimulus was paid for with borrowed money.
Though, to be honest, since those of us in the working class are paying into the Social Security fund, which currently has a 4 Trillion Dollar surplus - all in US treasury notes - I guess we may have kicked in a bit for it.
Is it just my observation, or are there way too many stupid people in the world?
Except a BMW 7 series can do something the Tesla absolutely can not do. Drive from NYC to LA in 38 hours. OR even detroit to Orlando in 20 hours. Tesla is a short distance car, perfect for your daily short commute. If you own a tesla you have to own another car for any long trips.
Do not look at laser with remaining good eye.
So what...
With all the money you save on gas driving a Tesla. You can rent a luxury Lincoln Navigator SUV or even an RV and drive from NYC to LA and still have a net savings on gas and $$$ over a BMW 7.
And the rest of the time you get to drive a cooler car. ;-)
Less moving parts on a Tesla. Likely lower maintenance too.
Or rent/fly like most people do. But you're right. It would be like trying to cross the country at a time when there were no gas stations.
http://soylentnews.org/~tibman
That's not exactly a scenario I or most other people do often enough to make it influence which car I buy. For the once a decade I need to get from NYC to LA in a day and a half, I can rent or take a plane.
Of course, the irony here is once the Supercharger network finishes building out along I-40, I may very well drive from coast to coast a few times, since the Superchargers are cheaper than airfare.
This
Tesla sold 5,000 Model S cars in just Q1 2013 alone.
http://soylentnews.org/~tibman
Except for the periodic battery replacements, which are mandatory and in the mid five figures.
It's definitely worth listening to the story, as there's a rich and interesting history that leads to the rather broken present reality in the States.
I remember sigs. Oh, a simpler time!
Another thing the BMW can do is cook a hamburger on the engine manifold. I'm just saying.
Of course BMW's aren't going to take off because every you need to move all your stuff, you need a moving van.
Mr. Musk builds toys for the rich and Slashdot repeatedly gives him mostly praise.
Must have something to do with that whole "making advances in technology" thing he does. I hear nerds are into that.
Walmart brings the necessities of life to countless working families at prices they can afford and is frequently lambasted for their trouble.
Must have something to do with how shitty they treat their employees. I hear people who've had to work there are concerned about that.
I'm sure I had more to add to this, but I don't want to miss the latest episode of "Ow my balls!".
Must have something to do with your desperate need to hate things. I hear there's medication you can take for that.
Not really, since electric cars precede those powered by gasoline.
We see many situations where US companies spend their cash to reduce their capitalization instead of investing. I understand it means they have too much money in their hand. That is, they do not pay enough taxes.
Musk has no employees on government assistance. Walmart explicitly pays employees just under the level to recieve government assistance so they don't have to provide health insurance. Tesla makes high quality products as they have shown they will reduce cost with out quality. Walmart sells disposable shit that ultimately cost more because they have no longevity. Teslas are manufactured in the usa. Walmart products are almost exclusively manufactured in china. Musk sells directly to his customers. Walmart is nothing but an unnecesary middle man getting wealthy off the ignorance of the people you think they are helping. Should I go on?
Of course, electricity wasn't all that common.
That is not Texas, as in the sovereign state government of hte state of texas.
That is an industry group representing car dealers located in texas.
There is a difference.
The guy who said the election was rigged won the presidency with the second-most votes.
I'd pay a premium for one if it were more reasonable. It used to be that getting a hybrid cost around $8000 more than an equivalent gas-only car, but now the difference is more like $3000-$5000. You still have to drive it for 5+ years before it makes up the difference with the gas savings, but I think it's worth it to help the environment (or stick it to the oil producers, at least).
Right now about 3% of cars in service are hybrids, so clearly the price difference is still a factor.
But wouldn't people who can afford luxury cars also be less likely to be concerned about the price of the gasoline in the first place?
I realize this is going to be far from universally true, but one of the major reasons to go with an electric car is because it's cheaper to run than a gas-powered vehicle. That advantage sort of shoots itself in the foot when the vehicle itself costs a significant premium above what a person who is likely to be concerned about fuel economy is able or willing to pay.
File under 'M' for 'Manic ranting'
Convenience is a real problem as well. I live in an appartment and the complex is not equipped with electric car charger. So having an electric car (or hybrid) is a real problem. (Though there is a charger in the garage at work.)
I almost never go to the dealer.
Dealer prices are usually outrageously expensive compared to a decent mechanic, but on the other hand I've experiences that tell me that some mechanics are sharks so it's important to establish a good relationship with a mechanic or learn to do it yourself.
I had this other experience where a Ford dealer tried to sell me a car and even after I told them my situation (no credit history) they insisted that they could "help" me, so when the salesman had to go get the manager; the manager sat down in the salesman's desk and after looking over some papers he started subtly laughing.
Another dealer had a car I could afford but wouldn't do test drives on Saturday (basically the only day I have to myself), so ultimately I ended up finding a nice little Volkswagen on Craigslist from a private seller.
So dealers? I could do without them.
For long trips you have a chauffeur anyways, or a pilot. They have cars and planes and whatnot.
Have you replaced them? No? Well STFU, the batteries will end up being useful for up to 2 decades. If you can afford a luxury car, you'll be buying another one within 10 years anyway, and by then battery technology will be better and cheaper yet for the dude who buys the used car.
I'm glad they got out of that deal. The government is an unpredictable lender. They go from being very generous and forgiving to being very harsh and unreasonable.
They also tend to encourage overbuilding or over-investment. Its the sort of thing that happened in the tech bubble where investors gave too much to start ups. It encouraged the start ups to spend the money even though they had no way to actually scale up enough to repay the investment.
Some things work better small.
In any case, glad they made it. Hopefully they can remain profitable through a few more quarters.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
If you owe money in this economy, paying it back early with liquid cash is a better value than holding it. Why have cash when it can't even keep pace with inflation? Savers are punished, and so are the taxpayers when this hot potato comes back to us before it has cooled. Who needs cash when its not worth the paper its printed on? Tesla is making a smart hedge on the current economic situation, which shows real sophistication in corporate automobile technology and salesmanship....
So, it's like an Apple computer on wheels?
The funniest part is that direct to customer is a very capitalistic & Conservative thing to do. And ensuring a support community for customers is a very Liberal thing to do.
The Model S is about the same price as a similar size luxury car like a BMW or Lexus, only it is more spacious due to not having a large engine and costs a lot less to run.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
..you too can own a Tesla. The reality is that most taxpayers who subsidized Tesla will never be able to afford one (without a second mortgage). This is just a company who succeeded in getting crony capital so that, if it failed, it could socialize its losses on to the taxpayer.
Government putting up money for basic research is one thing. Government 'investing' in business is just capitalism, something we need to eradicate...badly.
Technological progress has merely provided us with more efficient means for going backwards. -- Aldous Huxley
And the loan was entirely repaid. Interest payments fell short.
Perhaps, but Tesla also doesn't seem to be having any trouble selling as many Model S's as they can build.
I know a couple of Tesla owners already, and though you're right that they're not concerned about affording gasoline, they're also not significantly better off than I am. They are just interested in the technology, interesting in the car itself (it IS gorgeous), interested in having a large car (just a bit bigger than a 5 series) that can actually carry 7 people in comfort and has more storage space than any SUV on the market... or just mortified by just how close they were reaching to triple digits when filling up their previous cars (which were often Lexus, BMW or Mercedes). While they aren't concerned about the amount of money, they are usually smart enough to realize that significant rises in gas prices are going to be very hard to swallow. The price, not the gasoline :D
Typically they also tend to be college-educated professionals... managers and IT guys typically.
Today... but what about tomorrow when apartments start advertising "Covered parking with electric car outlet installed"? It'll happen... sooner rather than later. I've been seriously considering buying an apartment building myself as an investment... and I have seriously thought about doing exactly this. Obviously you need to be very aware of your market... but that might actually be a great selling point.
Your concern is certainly valid; but not everyone lives in an apartment. Certainly, the Model S and the next two models (the X and the "Gen3") are probably not going to be targeted at apartment dwellers anyway.
For myself, I'm closing on a condo in two weeks with a parking garage. I have talked to the building management about the possibility of running a charging connection to my assigned parking space and they're open to it so long as I am the one covering the cost.
Indeed... and it wasn't until the price actually *DID* come down that people really started buying them in any quantity.
It wasn't until the auto companies bought up and shut down profitable public transportation systems nationwide (including both local and long-range transport — streetcars, buses, and trains) and shut them down to increase demand for their product. When coupled with the development of the interstate highway system which was allegedly intended to promote national defense but which was actually unnecessary for that purpose (expanding a rail network provides for the same function, but delivers more transportation efficiency) this forced citizens to buy automobiles if they wanted to remain relevant members of society. I grew up in Santa Cruz as the child of a single mother who refused to buy a car. Some of our buses ran every fifteen minutes but that still resulted in adding hours to my day every day because of the dominance of cars and the ineffectuality of the bus system — again, a situation which was deliberately created by auto companies nationwide.
You're looking at history through typically rose-colored glasses. The fact is that it wasn't the price coming down that drove acceptance of the automobile; that was a result of acceptance of the automobile that was forced upon the populace, due to the deliberate removal of the systems which had naturally evolved to fill actual consumer need.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The Model S is comparable in purchase price to an otherwise equivalent gas-powered car. It's a large, high performance luxury sedan, and other cars of that size, horsepower, and trim level run $75 - $100k as well.
That's putting the cart before the horse. The Model S isn't competing in the luxury range because that's how it performs, and all high performance cars must have luxury features. There isn't that much different in construction costs between a Lexus and a Toyota compared to the end consumer cost. What you pay for the brand and the aesthetics.
That's not true of the Model S or the Karma -- they compete in that space because their base manufacturing costs are so much higher that they *can't* compete in the higher volume, lower cost sector. The luxuries are just there to placate the people who can afford the base costs. They're luxury cars because they have to be.
Wrong. Those transit systems were hemorrhaging money and bankrupt. GM bought up the bankrupt streetcar lines and replaced them with buses, which were cheaper, more versatile, more reliable, and faster than streetcars. GM only got in trouble because they didn't allow other bus makers to sell buses to those transportation systems.
Stop getting your history from "Who Framed Roger Rabbit".
As the price of car ownership fell further, intercity bus travel too became unprofitable. Intracity bus travel was always profitable and never went away. It is seeing a resurgence thanks to Chinatown bus services cutting costs.
http://marketurbanism.com/2010/09/23/the-great-american-streetcar-myth/
Think of all the interest payments the government lost...
...richie - It is a good day to code.
Except in the early days of motoring electric cars DID have the advantage, in both reliability and cost, and was overtaken by the internal combustion engine.
Electric cars will suck forever for the simple fact that batteries never have and never will have the energy density of liquid fuels do. Battery energy density needs to increase by a factor of 40 to match what a gallon of gasoline can do, but physics says that is impossible.
Ford averaged 61,500 Ford Focuses sold per quarter in 2012 just in the US. 5,000 cars is a rounding error in the car market. For a boutique car 5,000 units is fine, but nobody should be pretending that it's changing the car market.
The announcement didn't explain why. Would it not be better to keep the money and use it to boost production rates? Can anyone shed light on that?
Selling electric cars directly from manufacturer to buyer (over the internet and be delivered?) could change the car market though. It's a very interesting start anyways. I can't afford one though : /
You're right that 5k of one model is a very small percentage of the market. But it's certainly enough to grow a business from.
http://soylentnews.org/~tibman
At this point Tesla does not have a market, and it does not have a vehicle that would fit into the spending pattern of a common man. It is known that luxury companies do exist, and can exist - as long as they are acutely aware of their audience. Jewelers, for example, remain in business, even though the only use of a diamond I can think of is to cut glass with it. Tesla can supply into that market for a while, but that won't make them a player.
IMO, Tesla needs to produce an EV that costs under $20K new. A $15K would be even better. It should have range ... as good as it gets. Beggars can't be choosers. But probably 100 miles per charge would be OK for many. A $15K car that costs little to run would be an excellent reason to buy - and that would appeal to the mass market, to the people who have to count each dollar when they fuel up their current vehicles. The mass market will make Tesla.
Have you looked at new car pricing lately? $15K is basically where new cars start. The Chevy Sonic and Ford Fiesta both start at $14,xxx. The Dodge Dart starts at $15,995. There are some subcompacts for a little less, but even the Smart Coupe starts at $12,490. Kia has the Forte starting at $15,900 and the Rio at $13,600. If you want to get into higher-quality imports, the Toyota Corolla starts at $16,230 and the Honda Civic is $17,965. My very base model Cobalt LS (superseded by the Cruze, which starts at $17,130) for $15K a few years ago went so far as to consider the spare tire an option (the standard is a can of Fix-A-Flat) and its power accessories are limited to steering and brakes (not locks and windows). Short of stripped-down econoboxes, you should plan to spend close to $20K for any new car these days.
I have a commute of approximately 19 miles round trip between two little towns. My 25/37mpg Cobalt uses about $2,000 worth of gas yearly. I looked into the Volt (as I could still have long range trips come up with short notice, so the hard limit of a pure electric won't fly for me) and figured out that it should cut my fuel bill to about $500 a year. Let's just assume that a pure EV would result in the same 3/4 reduction in fuel cost for simplicity's sake.
Let's say you could make a decent EV (with acceptable range, whatever that works out to be), comparable to the base version of the second-lowest ICE model, that also managed to eliminate 75% of your fuel costs. If you sold it for the equivalent of one year's worth of fuel savings over the price of the ICE model, it should be a no-brainer. For two years' worth of savings, it should still be a pretty easy sell. Well, compared to current ICE compact cars, that's right around your $20K mark (depending on each individual's varying fuel costs). $25-30K is obviously a harder sell, but could still result in overall savings depending on the person's driving details and the cost of gas. Depending on how the long term maintenance costs work out (simpler driveline parts vs. battery pack costs), that could add more savings when looking at the TCO. If you could somehow pull it off for $15K, you would beat the ICE compact market in every respect. You wouldn't "have a market", you'd crush the existing market.
Then again, my $3600 motorcycle does 0-60 in under 4 seconds and I've spent less than $300 on gas for it in the last 11 months (50mpg average). However, it's not so great in inclement weather or with large loads.
The "pay as you go" is a very valuable concept. Take a common man and offer him two choices:
The common man will pick the first option. Why?
I understand what you're saying, and I agree with the general idea. However, I don't think the numbers you chose match up well to the ICE vs. EV comparison. What about these numbers instead?
Even "cheap" cars have gotten more expensive, so there's much less difference in the initial cost - more like an extra 50%, not 200%. Based on my own research comparing my Cobalt to a Volt, I think there's probably going to be more savings in recurring fuel costs too. Whereas your example shows that people will choose a low initial cost plus a recurring cost to get 20 years of service over paying that same amount upfront for 30 years of service, my example shows that the break-even point would come after just four years. Assuming you get 10 years of service out of the vehicle (I'm from the Rust Belt, not Cali), you're looking at a TCO of $50K vs. $35K. That's an extra 43% that you're paying for the comfort of the ICE you're used to. If you extend that out to 20 years, you get $80K vs. $40K. A break-even point of 20 years is completely different from 4 years when you're talking about something that's usually bought with a 5-year loan.
At this point, the long term reliability and maintenance costs of EVs aren't well known. If you have to spend $10K to replace your battery pack in 10 years, that puts it a lot closer to the TCO of the ICE. On the other hand, if the 20-year TCO of the ICE is $80K (remember that only 25% of that is the actual purchase cost), you can still save money by buying two of the EVs with a 10-year TCO of $35K. As others have stated, electric motors are quite reliable, so you may have some savings in maintenance costs there, and there are Priuses over a decade old that are still doing fine on the original batteries. The overall maintenance costs of ICE and EV could end up being a wash, or even in favor of the EV. At this point, we don't know what a 10-year-old Tesla will be like, but there's no guarantee that an ICE will be cheaper to maintain, and hopefully the existing hybrids and EVs can help us estimate.
I perfectly understand that Tesla has a [luxury] market. It is not the market for everyone, where a steel mill worker (assuming there is one left in the USA) could walk into the dealership (well, into a Tesla Store, I guess...) and order a Tesla car for his family use. I also understand that they are doing whatever they can. It's a harsh world, and Fisker's fiery demise is not making Tesla people too happy.
All I want to say is that Tesla will not get anywhere until they have a model for the mass market. They will remain a curiosity car maker for a few rich people, but they will not grow. Small market, especially the luxury market, is a dangerous place to be. It may take just one bad accident where the hardware is at fault to lose your reputation - and your sales.
I think if you sit down and look at the hard numbers, which will contain some variances for each individual as well as some not-very-proven data for EVs, I think you'll find that a $30K practical Tesla (not a $60-90K S) is a lot closer to the standard brand-new family car than you realize. With some incremental improvements to range and recharging (so that it could be refilled for another "tankful" of miles in the time it takes to do an average stop at a gas station/convenience store) to make it comparable to ICEs for extended trips, I think it could be a practical replacement for a lot of families. For example, a combination of improvements could bump the full-charge range up to 600 miles and m
Or you just rent one the 1-2 times a year you need a car that can travel long distances in a short amount of time.
Now that argument is invalid because you forgot to add "till now". Else If you are saying that Tesla can never achieve that mark, then you are an idiot. Tesla will surpass this, its just a matter of technology.
What mandatory battery replacement?
Okay, the batteries are warrantied for 8 years, and either 100,000 miles for the cheapest model or unlimited miles in the more expensive model. That's pretty close to the general 10 year life for a new car.
Oh, as far as I know, only Dodge offered an unlimited lifetime powertrain warranty. Most new cars give you 36,000-60,000 miles.
Agreed, and my mom only has street parking. This will take a while to change...and certain neighborhoods will never be very good for it. (ie: ones without driveways)