The image tweeted by Elon Musk of an astronaut dummy in a bright red convertible caused a stir in early February 2018. The live-streamed video following the Falcon Heavy launch had many calling out a hoax (even those outside the Flat Earth Society). Starman and the now-famous Tesla Roadster received a lot of attention; so we’re asking how the mileage and costs of an electric vehicle stack up on Earth.
Presently, only around 1 percent of the global market for vehicles is electric. While the share is growing, there are a few factors that have stopped all but the early adopters from making the switch to a plug. Many are holding out in the hope that upcoming models will far exceed today’s in mileage, and here’s the kicker: resale value.
According to the auto-analytics firm, Black Book, electric compact cars purchased in 2014 are now worth just 23 percent of their original sticker price. Compare that with 41 percent for comparable combustion vehicles. The relatively new technology seems to be following the same cycle as smartphones, effectively becoming obsolete after three years. That’s why leasing (over buying) might be a wiser option for those looking to drive some e-wheels.
According to Bloomberg New Energy Finance, US drivers lease almost 80 percent of battery electric vehicles. The high rate is perhaps due in part to the rapid depreciation and the desire to switch to (a higher capacity) top of the line model at the three-year mark.
A novated lease, whereby you pay for the vehicle using your pre-tax income, may not deliver huge savings for a little runabout. But, if you’re ratcheting up the odometer with long drives for work, this could be worth arranging with your accounts team. The other benefit of this form of salary packaging is you can lump together your rego, fuel and upkeep costs with the regular payment of the car.
If you’re looking to keep costs down, buying a second-hand electric model is another option, with some models from three years ago selling at a third of the original sticker price. Considering that the average battery warranty for e-vehicles is 8-years and they have fewer moving parts than a petrol engine, you’ll still get a lot of mileage from an older car. It’s worth noting that many older models can have their efficiency enhanced through software updates.
The good news is public charge points are becoming more common and new, more efficient models are still coming off the production line, albeit slowly. Tesla has been plagued by production bottlenecks, regularly missing production targets. However, as we move toward 2020, we’ll likely be seeing far more Tesla Model 3s on the road, alongside the Volkswagen e-Golf and Hyundai Ioniq.
Many countries, including India, France and Norway looking to turf traditional petrol vehicles, with the UK aiming for zero vehicle emissions from 2050. So there may be a way to go in this nascent sector, but the drive for change will likely see electric (silently) take over from traditional fuels in the decades to come. It’s only just taking off.
BTW, you can track Starman’s journey here: http://www.whereisroadster.com/.
This article does not represent financial advice. To discuss finance options for large purchases, make an appointment with your TWD financial planner.