Electric Truck Economics - Worth the Price?

[Love2Cyber]

If you are running a business with your vehicles, your accountant should be able to offset the depreciation and financial loss of operating a truck/EV, even of a "status symbol" version.

The question is always what the most cost effective way is to operate. There are many factors, from what type of finance you have, to what your investment returns are in comparison. Any investment that uses borrowed capital is viable if it pays itself and makes a profit. So if you are buying without using your own capital, then does it really matter if you earn more than you pay, seeing that either is not your money to begin with?

Well...if you're talking about running a business, it's utility for the cost difference...and increases in borrowed capital has an opportunity cost. I get that paper depreciation reduces your tax basis, but depreciation differentials also reflects the true extra cash outlays that you had to make in return for the utility of being a status symbol.

I might understand your concept here if the cybertruck provided some sort of differential marketing value to the business - since it really is a pretty truck. Other than that - looking at it from a truck related utility - it doesn't make financial sense for anyone looking to do work with it.

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[Jhodgesatmb]

Been thinking about the economics of electric trucks as I contemplate executing on my early reservation. Financials don't seem to make sense to me... With a typical battery replacement cost of $15-20k on a model S today, what will it cost for a cybertruck battery twice the size? Let's say it costs $30k. And - given history with Tesla's - you can expect to either replace a couple of motors or the battery pack within the first 150k miles or more. I believe this aspect is contributing to plummeting used Tesla values lately - particularly the ones on the other side of 50k miles. Obviously, declining new prices are a big factor too...

So - assuming you own a cyber for 150k miles and you're out somewhere north of $30k for a battery or motors on average...was it worth it? Alternatively - a solid one ton diesel wouldn't have any material problems in that range. So - you're thinking gas savings? If I drove the diesel 150k miles, let's say 15 or so mpg at $6 / gallon, that's $60k on gas for the duration. Depending on your cost of electricity, I'm guessing there is a big savings comparatively - let's say it costs $10k. So - $50k savings in fuel, loss of $30k in Tesla differential upkeep loss. Net $20k for the period. But - not so fast - Cybertruck will cost at least that much more than a solid FS diesel.

So - no net economic benefit / neutral if you're lucky - but you get the untested reliability and range anxiety of a cybertruck? Lot's of reasons to own one - just don't be fooled into thinking $$ is one of them.

Prove me wrong

You start with an incorrect assumption, namely that you will need to replace the battery pack. If I thought that I would have to spend a lot of money to replace the battery pack I do not think I would seriously consider an electric truck either (except that the same could be said for replacing an engine and/or transmission). The question is, how many miles do you think you will drive this vehicle for. These vehicles have battery warranties and I am hearing of even older MS/MX vehicles getting in excess of 300,000 miles. Most people would not run up that kind of mileage in 15 years (at 20,000 miles per year). The current M3 and MY vehicles may be able to get 500,000 miles, and the Cybertruck might be able to get 1,000,000 (for all we know). They will certainly do better than the older batteries. So you will never have to replace the battery pack. The next owner might, or the one after that, or the one after that.

There is almost no maintenance on an electric vehicle, at least not the kind you would have on a Diesel or gas car. No oil changes, no clutch jobs, no valve jobs, no timing belt changes, no alternators, etc. Did you factor that in? If you get 100,000 miles on that Diesel or gas car chances are you are going to have to pay a lot in maintenance and, very likely, a new engine and maybe a new transmission, in half (or less) of the miles your BEV will get with no maintenance.

The cost of fuel is a well-known savings, but more often than not gas or diesel prices are compared to supercharging rates and not to homeowner rates.

I have owned 2 hybrid SUVs and 2 electric cars. In each of the first 2 cars I calculated how long it would take to 'break even' on the extra cost, depending on the price of gas, and in both cases I passed the break even point before I paid the car off (less than 6 years). An all-electric car costs even less, so the break even point might be 3 years? These days several comparisons have been made of the upfront cost of sedans with similar features to M3 and MY vehicles and the Teslas are either 'even' or less expensive...out the door. So I am not buying the claim that the Cybertruck will be 10s of thousands more than a similarly-equipped Diesel.

Chances are good that diesel cars will no longer be sold anywhere in the world in the next 10-12 years, so you better sell your diesel truck in that time, and the number of people willing to buy one used is going to drop steadily.

Lastly, I do not need to 'sell' the idea of a Cybertruck to you, or 'prove you wrong' in your logic. At the end of the day you can do whatever you want to do, meaning that you can make poor choices on your own. I kind of hope that you do, because you have a dinosaur perspective. "Prove me wrong". Wow.

 

[JBee]

Well...if you're talking about running a business, it's utility for the cost difference...and increases in borrowed capital has an opportunity cost. I get that paper depreciation reduces your tax basis, but depreciation differentials also reflects the true extra cash outlays that you had to make in return for the utility of being a status symbol.

I might understand your concept here if the cybertruck provided some sort of differential marketing value to the business - since it really is a pretty truck. Other than that - looking at it from a truck related utility - it doesn't make financial sense for anyone looking to do work with it.

A simple example is using a CT's battery to buffer the grid. The CT battery pack costs the third of a powerwall per kWh and a Powerwall is profitable already depending on your network location.

Intrinsically, no tool adds value if it is not operated and maintained by someone to do so. The economy is one of people, not products or services. So like anything else, you can make a profit on operating a machine, if you find the right market and returns to operate in.

Accordingly, your statement that "CT" is "not viable in any way to work with it", is only valid if you constrain the market to legacy markets. It does not, and cannot incorporate markets that do not yet exist, or you have not considered or found out about yet.

Personally, I don't consider there to be a competition between ICE and EV, each has merit depending on the use case. But gradually there is a change in value that is heading towards EV.

In my case for example, the nearest Supercharger is 400km away, but I live off-grid and can charge EV's at home to my hearts content, for "free" in that the business operates and pays for the solar installed. If I wouldn't use the power it would just go to waste instead. That means most of the trips in my area are at zero ongoing cost, except for capex. This doesn't work everywhere, but once again you need to optimise for your location and conditions. More often than not there are enough "levers" that make it viable to change.

One very large concern is the variability of global energy markets, which has a knock on effect to every product and price in the economy, because every machine only works to magnify human output by way of being able to add energy to productivity. So the ability to be self sufficient for energy and mobility, at least locally, is a huge incentive to reduce dependency on fossil and ICE. In the end cost needs to be calculated beyond the annual horizon, and there I see EV's, especially those powered off-grid, giving pricing certainty and reducing costs, even against anthropogenic inflation.

Not all motivations are economic, but given the fragility of globalised markets, having the ability to take back some autonomy is a good thing IMHO.

 

[CyberTW]

Well, first off, it doesn't cost $20k to replace a battery generally. And you don't generally need to replace it. The vast majority put on the road, have not failed due to the battery.

https://www.motortrend.com/features/how-long-does-a-tesla-battery-last/

Also, Tesla guarantees the battery 8 years or 150k miles. That's like, about as far as most cars get. Most cars don't get over 11 years old.

There are Teslas out there with batteries that have gone hundreds of thousands of miles.

We don't know the exact numbers, but the operating costs to EVs are much, much lower than for internal combustion. Your periodic maintenance doesn't include things like timing, transmissions, oil, etc; and your brakes last for much, much longer. And tires don't burn out any faster than you would with a higher performing vehicle and a lead foot would.

So lay off the pedal in most of your driving and you're seeing far less dollars going out the window.

Just a Lightning, at their inflated price, comes out cheaper than a gasoline version after about 60k miles.

-Crissa
[/QUOTE

You start with an incorrect assumption, namely that you will need to replace the battery pack. If I thought that I would have to spend a lot of money to replace the battery pack I do not think I would seriously consider an electric truck either (except that the same could be said for replacing an engine and/or transmission). The question is, how many miles do you think you will drive this vehicle for. These vehicles have battery warranties and I am hearing of even older MS/MX vehicles getting in excess of 300,000 miles. Most people would not run up that kind of mileage in 15 years (at 20,000 miles per year). The current M3 and MY vehicles may be able to get 500,000 miles, and the Cybertruck might be able to get 1,000,000 (for all we know). They will certainly do better than the older batteries. So you will never have to replace the battery pack. The next owner might, or the one after that, or the one after that.

There is almost no maintenance on an electric vehicle, at least not the kind you would have on a Diesel or gas car. No oil changes, no clutch jobs, no valve jobs, no timing belt changes, no alternators, etc. Did you factor that in? If you get 100,000 miles on that Diesel or gas car chances are you are going to have to pay a lot in maintenance and, very likely, a new engine and maybe a new transmission, in half (or less) of the miles your BEV will get with no maintenance.

The cost of fuel is a well-known savings, but more often than not gas or diesel prices are compared to supercharging rates and not to homeowner rates.

I have owned 2 hybrid SUVs and 2 electric cars. In each of the first 2 cars I calculated how long it would take to 'break even' on the extra cost, depending on the price of gas, and in both cases I passed the break even point before I paid the car off (less than 6 years). An all-electric car costs even less, so the break even point might be 3 years? These days several comparisons have been made of the upfront cost of sedans with similar features to M3 and MY vehicles and the Teslas are either 'even' or less expensive...out the door. So I am not buying the claim that the Cybertruck will be 10s of thousands more than a similarly-equipped Diesel.

Chances are good that diesel cars will no longer be sold anywhere in the world in the next 10-12 years, so you better sell your diesel truck in that time, and the number of people willing to buy one used is going to drop steadily.

Lastly, I do not need to 'sell' the idea of a Cybertruck to you, or 'prove you wrong' in your logic. At the end of the day you can do whatever you want to do, meaning that you can make poor choices on your own. I kind of hope that you do, because you have a dinosaur perspective. "Prove me wrong". Wow.

Ya OP had a lot of details he glossed over to prove his position called out others.. this thread is lame

 

[CyberGus]

Actually, let me correct the record on this very common misconception. The typical car will remain on the road for 24 years or more unless it is lost to an accident.

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.

This is why it is a huge decision when you buy a new vehicle. Most people do not buy a new vehicle. (The used market is more than 3x the size of the new market as you would expect.) If you are among the top quartile who is lucky enough to be buying new, you are making a decision for the country that will last 25 years, long after you have forgotten about the vehicle.

The average lifespan of a car in the US is 12 years. They do not typically last 25 years.

https://www.capitalone.com/cars/learn/finding-the-right-car/how-long-do-cars-last/1512

 

[BayouCityBob]

The average lifespan of a car in the US is 12 years. They do not typically last 25 years.

https://www.capitalone.com/cars/learn/finding-the-right-car/how-long-do-cars-last/1512

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?

 

[newwave1331]

Been thinking about the economics of electric trucks as I contemplate executing on my early reservation. Financials don't seem to make sense to me... With a typical battery replacement cost of $15-20k on a model S today, what will it cost for a cybertruck battery twice the size? Let's say it costs $30k. And - given history with Tesla's - you can expect to either replace a couple of motors or the battery pack within the first 150k miles or more. I believe this aspect is contributing to plummeting used Tesla values lately - particularly the ones on the other side of 50k miles. Obviously, declining new prices are a big factor too...

So - assuming you own a cyber for 150k miles and you're out somewhere north of $30k for a battery or motors on average...was it worth it? Alternatively - a solid one ton diesel wouldn't have any material problems in that range. So - you're thinking gas savings? If I drove the diesel 150k miles, let's say 15 or so mpg at $6 / gallon, that's $60k on gas for the duration. Depending on your cost of electricity, I'm guessing there is a big savings comparatively - let's say it costs $10k. So - $50k savings in fuel, loss of $30k in Tesla differential upkeep loss. Net $20k for the period. But - not so fast - Cybertruck will cost at least that much more than a solid FS diesel.

So - no net economic benefit / neutral if you're lucky - but you get the untested reliability and range anxiety of a cybertruck? Lot's of reasons to own one - just don't be fooled into thinking $$ is one of them.

Prove me wrong

Who knows what will happen 12 years from now? Some of the OEMs are concerned about surviving the next 12-36 months.

 

[PilotPete]

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?

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.

EDIT: I looked at an old math book, here are what it lists as possible averages;
Arithmetic mean
Cubic mean
Generalized mean
Geometric mean
Geometric median
Harmonic mean
Interquartile mean
Lehmer mean
Median
Medoid
Midrange
Mode
Quadratic mean (or RMS)
Quasi-arithmetic mean
Truncated mean
Tukey median
Weighted mean
Winsorized mean
And that's just without going to the list marked as "Advanced Averages"...

 

[wtibbit]

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?

You are oversimplifying your estimate. The distribution of vehicle ages at the time of disposal is not a normal distribution.

This would give you some useful grounding on statistics: https://www.mymathscloud.com/api/do...tbooks/Statistics for Dummies.pdf?id=25302635

But, this whole analysis is just an interesting exercise for me, at best. I just want to own a vehicle with broad utility that will never burn another gallon of gasoline.

 

[flowerlandfilms]

Trying to decide if the OP is leaning more towards Luddite, or Troll.
Let's split the difference and go with Troglodyte.

 

[ÆCIII]

...
And - given history with Tesla's - you can expect to either replace a couple of motors or the battery pack within the first 150k miles or more. I believe this aspect is contributing to plummeting used Tesla values lately - particularly the ones on the other side of 50k miles. Obviously, declining new prices are a big factor too...

So - assuming you own a cyber for 150k miles and you're out somewhere north of $30k for a battery or motors on average...was it worth it?
...

Prove me wrong

Your lead in assumptions have no basis. What "history" data are you even trying to refer to?

You're applying typical incidence of legacy auto recurring service, into speculation of needs for a Tesla. But as others have noted, the history of Tesla motors and batteries are not what you speculate at all, and in fact they've been very reliable for most owners. Even Elon stated early on that the motor for the Model 3 should last for a Million miles.

You also conveniently leave out the oil changes, periodic service, and costs of ownership that the diesel drive train incurs outside of fuel.

Even if your assumptions were correct and based on solid data, or costs for the first 150K miles were actually equal for Cybertruck and diesels, you fail to realize that the Cybertruck will be stratospheres more advanced in driving experience, performance, acceleration, and technology.

I'm sorry, but your comparison is weaker than a fifth grade poorly prepared book report.

No one needs to "Prove (you) wrong"

You are the one that in fact needed to Prove yourself right, but your post didn't even begin to do that.

- ÆCIII

 

[Love2Cyber]

Thanks to all for proving me wrong. I had my concerns, but some very solid response points. I'll go ahead with my early reservation. If nothing else, if I don't like the shiny car I will sell it for a massive profit.

 

[bf1268]

Good point - ridiculous in that I forgot to account for the time value of money too! That up front premium for a BEV truck slug would pay off if invested instead.

I can appreciate how many arguments are framed around "many have been known to go for xxx miles" - c'mon folks, really? I had a model x that I sold right before 50k miles because the thing was flat our unreliable. The S P90D that I sold at 70k miles had both drive units replaced before then. I keep hearing how things have changed and that Tesla's are now more reliable...starting with the models built three years ago. Really? Time will ultimately tell if that is true, but history says no.

You'll be lucky to achieve high mileage - it happens, but currently for those that are lucky.

And hey - the good news - when the vehicle does start to break down, you'll have lot's of competition out there vying to get you back on the road. NO! Wait in line for when the Tesla SC wishes to gouge you.

I get it - they're neat and they go fast. Just don't make sense for people who care about money.

With the price of gas/diesel you could argue that ICE cars don’t make sense for people that care about money…. But buy what makes sense for you, everybody’s requirements are different.

 

[rjtumble]

Been thinking about the economics of electric trucks as I contemplate executing on my early reservation. Financials don't seem to make sense to me... With a typical battery replacement cost of $15-20k on a model S today, what will it cost for a cybertruck battery twice the size? Let's say it costs $30k. And - given history with Tesla's - you can expect to either replace a couple of motors or the battery pack within the first 150k miles or more. I believe this aspect is contributing to plummeting used Tesla values lately - particularly the ones on the other side of 50k miles. Obviously, declining new prices are a big factor too...

So - assuming you own a cyber for 150k miles and you're out somewhere north of $30k for a battery or motors on average...was it worth it? Alternatively - a solid one ton diesel wouldn't have any material problems in that range. So - you're thinking gas savings? If I drove the diesel 150k miles, let's say 15 or so mpg at $6 / gallon, that's $60k on gas for the duration. Depending on your cost of electricity, I'm guessing there is a big savings comparatively - let's say it costs $10k. So - $50k savings in fuel, loss of $30k in Tesla differential upkeep loss. Net $20k for the period. But - not so fast - Cybertruck will cost at least that much more than a solid FS diesel.

So - no net economic benefit / neutral if you're lucky - but you get the untested reliability and range anxiety of a cybertruck? Lot's of reasons to own one - just don't be fooled into thinking $$ is one of them.

Prove me wrong

I had my 2009 Ford F-250 in the shop to have the catalytic converters replaced. While it was there, the lade at the front desk told my my '09 would probably outlast the 2019 sitting just outside the door. It was in for it's THIRD!!! engine replacement. Apparently, Ford's motors lately are just that bad. This is anecdotal, but she see's them every day so I do attribute some credibility to her.

 

[Startreknerd]

Been thinking about the economics of electric trucks as I contemplate executing on my early reservation. Financials don't seem to make sense to me... With a typical battery replacement cost of $15-20k on a model S today, what will it cost for a cybertruck battery twice the size? Let's say it costs $30k. And - given history with Tesla's - you can expect to either replace a couple of motors or the battery pack within the first 150k miles or more. I believe this aspect is contributing to plummeting used Tesla values lately - particularly the ones on the other side of 50k miles. Obviously, declining new prices are a big factor too...

So - assuming you own a cyber for 150k miles and you're out somewhere north of $30k for a battery or motors on average...was it worth it? Alternatively - a solid one ton diesel wouldn't have any material problems in that range. So - you're thinking gas savings? If I drove the diesel 150k miles, let's say 15 or so mpg at $6 / gallon, that's $60k on gas for the duration. Depending on your cost of electricity, I'm guessing there is a big savings comparatively - let's say it costs $10k. So - $50k savings in fuel, loss of $30k in Tesla differential upkeep loss. Net $20k for the period. But - not so fast - Cybertruck will cost at least that much more than a solid FS diesel.

So - no net economic benefit / neutral if you're lucky - but you get the untested reliability and range anxiety of a cybertruck? Lot's of reasons to own one - just don't be fooled into thinking $$ is one of them.

Prove me wrong

Prove you wrong? How would you prove to all of us that 150,000 mi necessitates an entire new battery first.

Model 3 118k miles

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