Electric Truck Economics - Worth the Price?

[BayouCityBob]

Wrong. The average lifespan is not the same as the average age. Lifespan is life expectancy. Age is just that, the average age.

Let's say every car magically rusts away to powder on it's 25th birthday. This would mean the average age of cars is 12.5 years, assuming a constant purchase rate. But the average lifespan remains 25 years, since all cars live to be 25 years old.

The article doesn't seem to quote any study with actual facts, so it's not obvious which term should be correctly applied to this study. If average age is what was studied, then, yes, you are correct and the author of the article is a buffoon.

You are correct and we are saying the exact same thing. The Bureau of Transportation Statistics data he quotes is for the average age of a vehicle on the road which is currently 12 years.

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[SSonnentag]

Here's a link to the study results:
(1) New Messages! (spglobal.com)

A quick glance tells me that passenger cars remain on the roads MUCH longer than pickups and SUVs. Since trucks sell so much more, it drives the truck average age down. So the average age of passenger cars may be as much as double that of trucks. Too bad the actual data points aren't available.

 

[wtibbit]

I had my 2009 Ford F-250 in the shop to have the catalytic converters replaced.

Here's another ICE expendable (takes a while but they do reach an end of life) we won't have to pay for....

rjtumble, how much did the cat converters cost?

 

[Iamcomcy]

The typical car will remain on the road for 24 years or more...

The average age of all vehicles on the road is over 12 years old...

Please make up our minds. Typical and average mean the same thing in this context.

24 years? Where? Southern California? Anywhere there's snow in the winter there's no way there's anything left of a car that's driven regularly after 24 years. Where are you getting that number?

 

[Gurule92]

Im like 69% sure that this is a troll post but ill take the bait. (**I didnt read any other responses yet because i dont have that kind of self control**)

Batteries are extremely expensive to replace, but they dont typically need to replace the whole thing when something goes wrong. Also, it feels like you're completely ignoring the warranty period. Current warranty for 3 and y is, 120k miles or 8 years for the drive unit and same for the battery. I Believe this is longer than most people keep their car (first owner).

For the price of electricity vs gas, it depends on where you live and if you're smart about charging habits. I don't have to worry about peak times and things like that and my cost is only 11c/kwh, so its pretty cheap for me. See screenshot for my model Y. And this isnt even considering if you have solar or batteries, are involved in a VPP, or have utility company incentives.

(last 12 months)

The next screenshot shows my energy imported and exported from my solar which is also a cost consideration. Tax credit on solar is 30% and for me, I pay less for solar monthly than my average utility cost and will eventually have no solar payment but will continue to benefit from it on my electricity.

Initial purchase price is also dependent on location because you have to consider the tax credits available to you and the trim you go for. If you qualify for the tax credits and you grab a dual motor long range, youll be in a pretty sweet spot. I live in CO personally, so its like 12.5k total off right now. If the truck qualifies still in 2024, the federal credit is supposed to become a point of sale credit.

When you combine gas savings over the life of the vehicle, almost completely ignore your motor/battery worries because of warranty and then stack the tax credits on top. You're gonna be saving tons of money compared to buying a new truck with similar capabilities.

Honorable mention: don't forget them oil changes and other maintenance savings. (I dont like to harp on these because there are other things that likely even it out but i dont have the numbers. Hence honorable mention)

If you want to buy something that wont depreciate, let me know when you find it.

 

[agsteane]

I’m less dubious instead of the notion that BEV resale/depreciation is far more volition historically

buying a new anything isn’t a great financial decision, all else equal - so I’m not sure anyone’s starting with clean hands

YMMV

The newness of EVs has spawned an entirely new insurance segment - insurance for the auto manufacturers of resale values on leased vehicles.

If the manufacturer buy-back on a $100k EV after a 3 year lease should be say $60k, but the market value is only $50k that's a massive liability for the manufacturers. On the other hand, if it's worth say $70k, it's a winfall.

Specialized insurance companies are adding a cost to each of these new vehicle (e.g. $1000) with the actuary tables telling them it's a safe bet that the insurance company will make money overall. This is the same concept of life insurance applied to EV's on lease.

I realize this doesn't directly address your depreciation point at the individual level, just making the point that auto manufacturers and insurers have already been thinking about this en masse.

 

[rjtumble]

Here's another ICE expendable (takes a while but they do reach an end of life) we won't have to pay for....

rjtumble, how much did the cat converters cost?

If I recall, replacing two was just under $900. I had also just had more than $1500 worth of work done on it to fix a leaking exhaust gasket. The design of this particular model year is such that the whole engine has to be pulled to get to the passenger side exhaust (and apparently the passenger side leak is common).

Regular maintenance was not really discussed in the original post, it was mostly just comparing gas to electricity, but I think the ongoing maintenance of an ICE is a big contributor to TCO.

 

[agsteane]

Please make up our minds. Typical and average mean the same thing in this context.

24 years? Where? Southern California? Anywhere there's snow in the winter there's no way there's anything left of a car that's driven regularly after 24 years. Where are you getting that number?

Agree with your point.

Probably better to use "MEAN" vs "AVERAGE". A Model T that is still registered and roadworthy will sku the results via Average for example, and "classic" cars is a pretty segment that's large enough it may fudge the overall math.

Also, the other post suggesting that we take into consideration vehicles being shipped to South America as still on the road makes no sense. That cost is no longer on the books for the average North American, so factoring that into the cost equation is a logical fallacy.

 

[SSonnentag]

You are correct and we are saying the exact same thing. The Bureau of Transportation Statistics data he quotes is for the average age of a vehicle on the road which is currently 12 years.

Yep. I figured that out and deleted my post.

 

[BayouCityBob]

Sorry Bob, but your math teacher failed you.

There is a massive difference between "average","mean", "median", "mode", and "mid-range". Most people refer to "average" and mean "mean". If the mean average is 11.8 years of 10 cars on the road, NONE of them has to be 22 years old. You could have 9 cars that are 13 years old, and 1 car that is 1 year old. that gives you a total age of 118 years, and a mean average of (wait for it) 11.8 years. No car is 11 or 12 years old, no car is older than 13, and only 1 car is younger than the average. In median average you could have 10 cars, 1 is 11.8 years, 4 that are 12, 1 is 11, 1 is 5, 1 is 4, 1 is 3, 1 is 1, and you'll get a median average of 11.8. None are 22 years old. In the mode average you could have 5 cars that are brand new, 5 cars that are 12 years old, and 6 cars that are 11.8 years old, and the mode average is 11.8. Only the mid-range average, which takes the oldest and the newest and give you a number in the middle, regardless of the distribution. So you could have 500 cars that are all 1 year old, and only 1 is 22.6 years old and you get 11.8. You can play with the types of "averages" and make your statistics come out all sorts of different ways, depending on how you want the data to turn out. So your assumption that you "obviously" need to last twice as long isn't correct with ANY type of average. And no, if the typical vehicle lasts only 12 years, it most certainly would not give you an average of 6 years as an assumption. For your assumption to be correct, assuming a mean average, then year over year car sales would need to be balanced. And we know that isn't true.

And just because you say "no offense but..." doesn't make what you say next non-offensive, or even less offensive. my high school step-son tries to say that all the time. I expect it from someone his age.

Oh my goodness. First the "no offense" comment was directed at @CyberGus who was just posting an article. The comment is absolutely intended to cause offense to the author of the article who is misreading or misrepresenting the data from the Bureau of Transportation Statistics. There average age of a vehicle on the road (mean) is 12 years old according to the BTS. (It was 11.8 when the author wrote his article and it is 12.2 now). The discussion of mean, median, mode etc. is not a misunderstanding, it is irrelevant. The number is a mean.

I actually explained much of what you are discussing in my original post below. The auto market in the US is roughly running at replacement rate with modest annual fleet growth. I was making the simplifying point as an illustration to show that if you have a steady input rate of x per period and a fixed life of y periods then your average age will be 0.5y, right?

Here is my original post.

The average age of all vehicles on the road is over 12 years old (see this link). In order to get an average of 12 years you need (roughly) the typical or average new vehicle to last about 24 years.

The math gets more complicated because (a) some vehicles remain on the road for 40, 50, even 100 years and those skew the average but on the other side of the equation (b) a bunch of used vehicles are exported each year and they are still on the road in central America mostly but also other places and they make the average look lower than it really is and (c) vehicles are lost to accidents making the real useful like look shorter than it really is. A good walking around number is ~25 years.

 

[BayouCityBob]

Please make up our minds. Typical and average mean the same thing in this context.

24 years? Where? Southern California? Anywhere there's snow in the winter there's no way there's anything left of a car that's driven regularly after 24 years. Where are you getting that number?

What I said was that a new vehicle put on the road will last, on average, ~24 years unless it is lost to accident. The US data all support this as follows:

• The US has 283 million light duty vehicles on the road this is the fleet.
• The average (mean) age of the Vehicles in Operation is 12.2 years (longer for cars than trucks)
• Annual sales of Light duty vehicles per year over the past twenty five years is 15.5 million a year.
• The US exports just under 1 million used light duty vehicles each year for a net fleet addition of 14.5 million vehicles a year.
• The scrapage rate in the US fleet runs between 4% - 5% per year and this includes total loss accidents which represent 1% - 1.5% per year.

https://www.spglobal.com/mobility/e...ehicles-in-the-us-increases-to-122-years.html
https://www.statista.com/statistics/199983/us-vehicle-sales-since-1951/

 

[BayouCityBob]

One other point that may help:

• The US has 283 million light duty vehicles on the road.
• Over the past 19 years (2004 through 2022) there were 290.110 million vehicles sold.

 

[wtibbit]

If I recall, replacing two was just under $900. I had also just had more than $1500 worth of work done on it to fix a leaking exhaust gasket. The design of this particular model year is such that the whole engine has to be pulled to get to the passenger side exhaust (and apparently the passenger side leak is common).

Regular maintenance was not really discussed in the original post, it was mostly just comparing gas to electricity, but I think the ongoing maintenance of an ICE is a big contributor to TCO.

When we were designing large hardware systems in the concept phase our initial maintenance cost forecasts were based on estimated parts counts. The algorithm was simple and the parts count was just a multiplier; increase the parts 2x and the cost increased 2x. That factor turned out to be appropriate even after delivering the system.

The estimated number of parts in a BEV vs ICE vehicle varies a good bit, depending on the source, but it’s at least 80% lower for the BEV. I think it’s safe to say the wear out replacement and preventative maintenance costs are reduced at least that much over a typical ownership period. It would be reduced a lot more if only moving parts are considered.

 

[CyberGus]

No offense but the author here is an idiot. He is misreading the BTS statistics that say the average AGE of a vehicle on the road is 11.8 years (in 2020). If the average age of a vehicle on the road is 11 years, they obviously need to last twice that long, right? If the typical vehicle only lasted 12 years, the average age on the road would be less than 6 years, right?

Here's a few more "idiots" for you.

"According to the Bureau of Transportation Statistics, in 2020, the average lifespan of a vehicle in the United States was 11.9 years."
https://www.capitalone.com/cars/learn/finding-the-right-car/how-long-do-cars-last/1512

"“The average lifespan [of a car] is now almost 12 years,” says Eric Lyman, chief analyst at TrueCar."
https://www.aarp.org/auto/trends-technology/how-long-do-cars-last/

"On average, a vehicle will last approximately 11-12 years on the road."
https://woodiesautoservice.com/blog/how-long-will-a-car-typically-last


Since it's not credible for both the average age AND lifespan to be 12 years, the statistics are being badly collected, presented, and/or interpreted. I'm having trouble finding the raw data to perform my own analysis.

Some of it may just be poor wording. For instance, families on average may have 2.3 children, but the average family has only whole children. As Pete pointed out, statistics are often misinterpreted, and "average" is usually a poor metric (median is more meaningful in most contexts).

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