Leaf buying rationale: TCO or mid-life crisis

[thankyouOB]

TCO or mid-life crisis? Neither. My reasons are the same as those PatricioEV and GPowers mentioned:

I bought my Leaf because I've wanted an electric car for many years and it was the first one offered for sale to anyone on a broad scale.

Leaf buying decision was based on using a DOMESTIC energy source! As in, independence from rising foreign oil prices. And the plus is, the energy source and production are the solar panel on my roof. So I control the cost of energy, not some guy in the middle east.

TCO is irrelevant since the LEAF isn't remotely cost-effective at present: a gas-sipping used car would be vastly cheaper in TCO even if gas was at $5 a gallon. And at age 58, having retired at age 45, I am well past any sort of "mid-life crisis".

how is it not cost-effective?
I bought it for 20k after the 5k CA rebate and 7.5k tax credit from the feds.
there was tax, but there would be tax on any car and that too is tax deductible, as I itemize.
I save at least 2k a year in gasoline expenses and maybe another $200 on other car expenses.
If I had to buy power, I would be running the car at 2 cents a mile (electricity) instead of 18 cents a mile ($4 gasoline times 22 mpg) for my previous commuter. Over 14,000 miles a year, that is $2k;
and getting the EV rate from my utility lowers the cost of all my power all weekend and from 8 pm to 10 am weekdays.
I dont know when I will have to replace the battery, so that remains an issue.
It is a fine commuter car with lots of toys, including nav and hands-free devices.
I am not even counting that I have solar, and so I dont pay anything for power.

As to the question posed by the poster: This is about it penciling out for the earth and it is patriotic, too, and it makes me feel right to know that I am doing something to clean the air, end our dependence on fossil fuels, save lives, save our future and get us out of needless wars pushed by the oil warriors.
and the HOV lane :lol:

 

[GaslessInSeattle]

I'm scratching my head wondering the same thing. how can someone say it's not cost effective. I'd put money on it that it proves to be the most cost effective type of new car available to date. I'm seeing a $2,000 savings in gas a year and thinking this car is going to pay for itself in it's lifetime... I don't know of any other type of car that can touch that. As for why we bought one? Because it makes financial sense, makes environmental sense and because it fits our family of 4 better than a Prius, the fuel is renewable and domestic... the reasons go on and on. Just wish they'd hurry up and get the 60+ L3's in place in the metro area, we'll have a real party then!!!

TCO or mid-life crisis? Neither. My reasons are the same as those PatricioEV and GPowers mentioned:

I bought my Leaf because I've wanted an electric car for many years and it was the first one offered for sale to anyone on a broad scale.

Leaf buying decision was based on using a DOMESTIC energy source! As in, independence from rising foreign oil prices. And the plus is, the energy source and production are the solar panel on my roof. So I control the cost of energy, not some guy in the middle east.

TCO is irrelevant since the LEAF isn't remotely cost-effective at present: a gas-sipping used car would be vastly cheaper in TCO even if gas was at $5 a gallon. And at age 58, having retired at age 45, I am well past any sort of "mid-life crisis".

how is it not cost-effective?
I bought it for 20k after the 5k CA rebate and 7.5k tax credit from the feds.
there was tax, but there would be tax on any car and that too is tax deductible, as I itemize.
I save at least 2k a year in gasoline expenses and maybe another $200 on other car expenses.
If I had to buy power, I would be running the car at 2 cents a mile (electricity) instead of 18 cents a mile ($4 gasoline times 22 mpg) for my previous commuter. Over 14,000 miles a year, that is $2k;
and getting the EV rate from my utility lowers the cost of all my power all weekend and from 8 pm to 10 am weekdays.
I dont know when I will have to replace the battery, so that remains an issue.
It is a fine commuter car with lots of toys, including nav and hands-free devices.
I am not even counting that I have solar, and so I dont pay anything for power.

 

[pjoseph]

I'm scratching my head wondering the same thing. how can someone say it's not cost effective. I'd put money on it that it proves to be the most cost effective type of new car available to date. I'm seeing a $2,000 savings in gas a year and thinking this car is going to pay for itself in it's lifetime... I don't know of any other type of car that can touch that. As for why we bought one? Because it makes financial sense, makes environmental sense and because it fits our family of 4 better than a Prius, the fuel is renewable and domestic... the reasons go on and on. Just wish they'd hurry up and get the 60+ L3's in place in the metro area, we'll have a real party then!!!

Worth quoting. Gives me clarity of thinking

IMHO, Leaf's breakeven is still at 100 K miles with conservative assumptions of maintenance unknowns. That is a long timeframe for a world that is obsessed with instant gratification.

But gas at $3.25 already has America on the edge. It is only a matter of when it will get to $5, and that will be a game changer. Much of the world already pays that much and drives matchbox like cars. Even when cars are certainly getting more fuel efficient (30 to 50 mpg).

Bottom line is that electric cars are a hedge against the volatile oil prices. Not discounting other factors such as self-sufficiency and green living.

 

[smkettner]

I have been driving my 14.5 mpg F150 for 10 years and the gasoline cost was getting to wear on me. I was looking for a smaller commuter car anyway and really liked the idea of driving the all electric Volt. But then GM put a gasoline engine in and I was out. I was OK with a hybrid but I wanted 75% EV 25% gas and they all seemed to be the other way around. Maybe an EV where the gasoline only connected above 45mph for hiway use and possibly as only a generator below that to enable a single speed gearbox transmission. I saw no reason to have a gas motor larger than the 1.0 liter 3 cylinder in my old Sprint.

Nissan comes along with an all electric and I am good to go. Not buying gasoline for day to day transportation was the appeal to me. So maybe a little of both TCO and MLC. Truth is I was very intrigued by the EV1 but it was not right for me at the time and I don't do leases.

Still have the truck for when I need a truck.

 

[lpickup]

Unfortunately I was reminded the other day about one of the key reasons I got a LEAF. I haven't really been to the gas station (other than over the holidays when we took a 1700 mile trip to visit relatives) and haven't been paying attention AT ALL to gas prices, but I figured they were around $3.25. So I'm in our gas powered van (that my son drives and pays for gas almost exclusively) and see it's just about empty, so I thought I would do him a favor and fill it up for him. I passed by BJs because it's such a pain in the @$$ to get in and out of and went to the gas station near our house we used to go to. $3.45! But that's not the annoying part. The very next day I drove by and it was $3.29. It's that kind of volatility that I wanted no part of. And this particular station changes their price several times during the course of a day (I think they raise it during rush hour).

 

[pjoseph]

We women may be outnumbered but we are by no means unrepresented!

My gut is that the ratio is 99:1

Thanks for the pointer though. It's good to know there are some adventurous types :mrgreen:

 

[adric22]

We women may be outnumbered but we are by no means unrepresented!

My gut is that the ratio is 99:1 :

Well, I have only encountered one other leaf "in the wild" in my area of Ft.Worth and it was a woman driving the car. Of course, it might not have been "her" car because my wife also drives my Leaf on the weekends a lot (to save gas).

 

[dgpcolorado]

how is it not cost-effective?
I bought it for 20k after the 5k CA rebate and 7.5k tax credit from the feds.
there was tax, but there would be tax on any car and that too is tax deductible, as I itemize.
I save at least 2k a year in gasoline expenses and maybe another $200 on other car expenses.
If I had to buy power, I would be running the car at 2 cents a mile (electricity) instead of 18 cents a mile ($4 gasoline times 22 mpg) for my previous commuter. Over 14,000 miles a year, that is $2k;
and getting the EV rate from my utility lowers the cost of all my power all weekend and from 8 pm to 10 am weekdays.
I dont know when I will have to replace the battery, so that remains an issue.
It is a fine commuter car with lots of toys, including nav and hands-free devices.
I am not even counting that I have solar, and so I dont pay anything for power.

I'm scratching my head wondering the same thing. how can someone say it's not cost effective. I'd put money on it that it proves to be the most cost effective type of new car available to date. I'm seeing a $2,000 savings in gas a year and thinking this car is going to pay for itself in it's lifetime... I don't know of any other type of car that can touch that. As for why we bought one? Because it makes financial sense, makes environmental sense and because it fits our family of 4 better than a Prius, the fuel is renewable and domestic... the reasons go on and on. Just wish they'd hurry up and get the 60+ L3's in place in the metro area, we'll have a real party then!!!

The TCO calculations are fine if comparing new cars to other new cars but most financial planners agree that new cars aren't cost-effective compared to used cars. As almost everyone is aware, a new car depreciates by thousands of dollars the moment it is driven off the dealer's lot. The price of a fuel-efficient used car can be so much lower than a LEAF, even with tax credits, that the difference would easily pay for the price difference between gasoline and electricity (and, unless one got solar panels for free, even solar electricity isn't really "free") as well as maintenance costs.

The LEAF is kind of a special case because the tax credits change the calculations somewhat and there aren't enough used ones available to make a meaningful market. But if one wanted to wait a couple of years there may be a glut of LEAFs coming off-lease at much lower prices and that might be a less expensive way to drive electric than buying a new one.

So, I don't buy the idea that buying a new LEAF makes financial sense even with tax credits. There are too many unknowns (replacement battery prices? future gas prices? resale value?) to make that claim. Leasing is even worse. After paying all that money one is left after a few years with nothing but the miles that one has put on it. For the LEAF leasing makes sense only as a technology hedge (and that's a very good reason to do it).

 

[edatoakrun]

BEV TCO is largely dependent on battery life and replacement cost. On the latter subject:

DETROIT -- U.S. Energy Secretary Steven Chu said today he believes electric cars will be a major segment by 2020 because of the "plummeting" price of batteries.

Chu, speaking to reporters today on the sidelines of the Detroit auto show, said he thinks the industry has a "good shot" of hitting the Obama administration's ambitious target of putting 1 million electric vehicles on the road by 2015.

"Whether it is 2015 or 2016 or whenever, I don't know. I think it is possible," Chu said. "It depends on a lot of things. The price of batteries is plummeting."

Three or four years ago, the cost of manufacturing a battery was $1,000-$1,200 a kilowatt hour, Chu said. It's now about $600 a kilowatt hour, he added. "It's going to come down and everyone knows this," Chu said...

http://www.autonews.com/apps/pbcs.dll/article?AID=/20120110/OEM11/120119980/1186" onclick="window.open(this.href);return false;

If Battery prices were to continue this rate of decline, by the time I put 80,000 to 100,000 miles on my LEAF, the cost of a replacement pack would be in the low four figures.

I don't expect battery prices to decline... this rapidly.

But I do believe that, far sooner than most now expect, it is likely that rising comparative gasoline and maintenance costs, will lead to ICEVs being uncompetitive with BEVs, in TOC.

 

[thankyouOB]

Wait a minute, Colorado, you just went all apples to oranges on us.
I thought the correct and logical TCO is new car to new car, not used to new.
Besides, I dont buy used. I dont know the car's history. I keep cars for 10+ years unless they are in a severe accident. I want them taken care of from day one. That has worked for 35 years.

As to the solar, it is calculated and amortized into my home power use. the cost is covered in 10 years, and so the car power is free now. and 3.5 of those years are already in the rearview mirror.
I could put the gasoline offset cost in there, then the payback period is 3 years.
And then, powering the house and the car is free.

 

[smkettner]

Perception of TCO matters more than actual estimates.

 

[DaveinOlyWA]

The TCO calculations are fine if comparing new cars to other new cars but most financial planners agree that new cars aren't cost-effective compared to used cars. As almost everyone is aware, a new car depreciates by thousands of dollars the moment it is driven off the dealer's lot. The price of a fuel-efficient used car can be so much lower than a LEAF, even with tax credits, that the difference would easily pay for the price difference between gasoline and electricity (and, unless one got solar panels for free, even solar electricity isn't really "free") as well as maintenance costs.

a lot of people believe that bolded statement and its easy to see why because in some cases, that is true. for me?? not so much.

price a car with NAV, smart key, etc. then check out the difference in price (i have not a clue since i have ZERO interest in any gas car, so dont know)

so maybe its $20,000?? lets say it is. you may adjust the lower figures as you see fit.

so, here its $20 K plus tax so will say OTD price about $21,800 (about 9 % here) gas cost for 35 mpg driven 12,000 miles at $3.50 a gallon average (this is obviously optimistic because even 40 mpg cars do not average that much on yearly average due to winter) but that conveniently comes to $1200 in gas.

so minimal TCO after 5 years $6,000 (not gonna count maintenance since it varies widely

so that is 21,800 + 6, 000 or 27,800


now lets take my Leaf. paid $34,655 no sales tax, minus $7500 tax credit (since i leased its all taken off the top) so down to $27,155 add about $600 for conversion to purchase, etc. so it 27,755. make it $28,000

now drive 12,000 miles FOOLISHLY ignoring all the freebie charging spots (despite Ecotality's best efforts, there will be still free charging around here, some have been here for years) and averaging a bloated 3 cents per mile in electricity (see my signature for real #'s) that makes 360 a year in power. or 1800 in "motive force" cost

so TCO around $29,800 verses $28,000. now, will maintenance differences make that up?

IF
you can actually average 35 mpg. pretty lofty now, but we have cars coming in that should do it easily. will they seat 5?

IF
gas stays at $3.50 or less

IF
you have solar and have no fuel costs which means in 3 years, its a break even. heck, the lease would still be running!

IF
you can get one at $20,000. remember i dont need smart key entry but after 8 years, i am not sure i b willing to go back to the other option, in fact, i would not PERIOD.

many hesitate on EVs due to the "what ifs" but my math tells me that the ICE is winning the "what if" numbers

P.S. you cannot compare TCO between new and used cars.

 

[lpickup]

I don't expect battery prices to decline... this rapidly.

I agree. Coincidentally I was just looking this topic up this morning and came across this:

http://dukespace.lib.duke.edu/dspac...d=18A106F2B810291EAEDDF0686B225A2C?sequence=1

It's fairly recent (2009) and does show battery cost leveling out, but we are still very much still in a pretty decent downward trend.

It could be what Dr. Chu is referring to is dramatic new battery technologies that will probably not be compatible with existing vehicles, but will result in "plummeting" $/kWh battery costs.

For those looking at battery pack replacement costs I think the driving forces are going to be how widely the CURRENT technology becomes commodotized which I believe the paper I linked describes which in turn is going to be driven by the amount of demand out there for replacement packs.

 

[Amary]

… $27,155 add about $600 for conversion to purchase, etc. so it 27,755.

I agree with your analysis in general. But don't you have to pay WA sales tax on the full lease buyout amount? (The electric car exemption only applies to the original purchaser, NILT.)

 

[bowthom]

My wife has less range anxiety than I do. I tend to shift into extreme economize mode if expecting to drive a long ways. My wife just goes about her merry way and has made it home with - - - showing many times. I asked her if she's worried about it and she says "I knew I'd make it but if I don't, I know you'll take care of it." Hmmmmmmmmm.

If you are referring to the whole electric car thing, I would agree. But if you are referring to the body style, I would disagree. I have had several women stop me in parking lots to compliment me on how cute my car is. When I began to talk to them about it, they had no idea it was electric powered.

Yes indeed. Thanks for clearing it up. The Leaf design (except for the Navi) is futuristic (out of the Jetsons?) and is surely a head turner.

But range anxiety is an issue with almost all of the women i know. Wonder if they will ever get over it. Are all women wired this way (searching for comfort and security). Guess i hardly know any adventurous types.

 

[DaveinOlyWA]

No sales tax no matter lease or purchase.

As far as battery prices the cost will be set by the market not technology. It will take Decade but replacement cost will be about $5~8,000 but the pack will be rated for 200 miles.

I predict that once again the cost of has will be the main determining factor for battery prices

 

[dgpcolorado]

DaveinOlyWA, From my perspective, the problem with your TCO analysis is that you assume the LEAF's "bells and whistles" are a given. I'd have preferred that many of those things were not on the LEAF and the price were a bit lower. So, trying to find an ICE car with all those features is irrelevant. Did you really buy the LEAF because it has a Nav system and a smart key? I'd rather delete a lot of the stuff the LEAF came with and make it a bit smaller, simpler, with fewer expensive gadgets to break. So, comparing it to a less fancy used car makes sense if the goal is basic commuter transportation. Seat five? I've never done that; I like hatchbacks because of space utility not the back seat, but they don't have to be quite as wide as the LEAF.

I didn't say it before but, for inexpensive transportation, just buying a "beater" car for a few thousand dollars and budgeting a few thousand more for repairs/maintenance is a LOT less expensive than buying a new car for $20K+ even if the electricity for a LEAF is less expensive than gasoline. The cheap fuel costs and (one hopes) reduced maintenance costs for the LEAF are a bonus, but buying a new car is more of a consumption decision than a least-cost transportation calculation.

That gets back to my main "LEAF buying rationale": reducing the use of oil, with all its nasty geopolitical and economic consequences. For that I was willing to buy the exceedingly expensive, not remotely cost-effective, new LEAF. "Voting with my dollars", so-to-speak.

 

[dgpcolorado]

No sales tax no matter lease or purchase.

As far as battery prices the cost will be set by the market not technology. It will take Decade but replacement cost will be about $5~8,000 but the pack will be rated for 200 miles.

I predict that once again the cost of has will be the main determining factor for battery prices

While I would very much like the replacement battery packs for the current LEAF to be an improved version, I have my doubts that Nissan will be able or willing to make a pack with new technology fit the car and the existing charger and firmware.

We shall see.

 

[DaveinOlyWA]

keep in mind, prices for any product is set by demand, not cost to manufacture. if that was the case, intel processors would be $6.99 a dozen.

initially battery pack replacements for the Leaf for example may run $15-18,000 but mostly because its a specialty item.

now, how can that be? in a mass produced car? well, we may have 25,000 Leafs running around right now, but what is the battery replacement demand?? 10? 20?...probably not that high. so Nissan sets aside a few. maybe a dozen. they ship them over, warehouse them somewhere, then when there is a demand, ships them over. prorated shipping costs will add a grand to the ticket alone.

but that landscape will change dramatically when the battery plant comes online. current technology pack replacement will drop to $8-10,000. in 2 years it will be 6-8,000. then battery pack 2 will come out and its replacement cost will be not more, but the same. it will be similar in size and weight and cost but it will perform 50+% better.

 

[GaslessInSeattle]

...That gets back to my main "LEAF buying rationale": reducing the use of oil, with all its nasty geopolitical and economic consequences. For that I was willing to buy the exceedingly expensive, not remotely cost-effective, new LEAF. "Voting with my dollars", so-to-speak.

Hmm, I think I've said this before, but either I've bought wisely or been very lucky. So far, over the last several new car purchases, I've been able to buy and resell several "green cars" within a couple of years of ownership in the Seattle area for remarkably close to what I bought them for. Time will tell if the Leaf holds it's value in it's niche like the hybrids and TDI's I've owned. If I can get away with it, I'll keep upgrading to newer models for only a few thousand loss each year. The tax credit also creates the possibility of somewhat bolstering the value if there are enough buyers out there that don't qualify for the credit and will therefore be more inclined to buy used. Also bolstering the used market up here, is new car buyer guilt. There are a bunch of folks up here that buy used simply because they feel guilty about the environmental impact of buying new, and they are willing to pay nearly new prices for newish used cars.

At one point, a used Prius sold for more than new around here. Maybe we are in some kind of bubble up here, dunno.