Hello $wanigans! Thanks for checking out the site today. Lately I have been getting more and more excited about buying an all-electric vehicle. Is anyone else with me? Tesla has given the whole industry such a huge push forward that the idea is much more mainstream. But it isn’t just Tesla anymore, other car companies are beginning production and marketing EVs (electric vehicles) and the quality is improving. You may not even know it yet, but maybe you will be buying an EV for your next car too!
I must acknowledge upfront that I’m not actually in the market for a car right now, nor am I in need of a new car in the near-term. Some of you may recall my post shortly after I bought my 2015 Nissan Pathfinder. I got quite a deal on that purchase and the car clearly has a long-life ahead of it. Lucy and I drive to work together 90%+ of the time, so we rarely use our second car which is a 2007 Altima which has <100K miles on it. That too will be around for a while.
But that doesn’t keep a boy from dreaming! What once was a dream of buying a new EV is now coming more into focus.
Why Have I Become Obsessed?
In conversation with my boss not long ago, he mentioned how he’s been looking at mid-life crisis cars. He actually readily admitted he is a little passed the typical mid-life crisis age, my guess is he is around 60 or so. While I don’t think he would ever pull the trigger, he’s been talking about Lamborghinis and other super expensive cars. Knowing his background, Midwestern roots, frugal mindset, and history of driving cars 10+ years and into the ground, I think it is safe to say his dream won’t be a reality. It would go against ever fiber in his body to buy a car over $100K.
But in that conversation, I told him how my next car will likely be an EV. He was a little blown away, EVs weren’t really on his radar. I talked to him at length about Tesla, all the models they have out, how they are luxury cars with good traveling range and high safety ratings, battery mileage range, battery lifespan etc. He quickly realized I am a bit of an EV enthusiast.
After that conversation though I can tell he has been looking into Tesla. He keeps bringing it up and asking me questions. Kind of funny, but as he continues to bring it up over and over, it has gotten me more and more interested and looking around the EV marketplace.
Oh the Options!
As I’ve done so, I’ve quickly realized that the options have truly been getting better year after year. The 2018 Nissan LEAF now has a range of 151 miles, up from 107 in the 2017 model. And the 2019 LEAF is expected to have over 225 mile range! That is some real progress. GM has made some similar strides. The 2016 Chevy Bolt offered 53 mile range whereas now the 2018 Bolt offers 238 mile range. This is becoming more and more competitive to the Tesla Model 3 range of 220 miles which is the more price competitive ($35K model) and price comparable to the LEAF and Bolt.
On the Horizon
So much more is on the horizon too. While there are a number of good EV options available today, such as various Tesla models, the LEAF, the Bolt, the BMW i3 (2018 model has 114 mile range), etc; there are a number of new ones expected to hit the road soon. VW is planning to launch 50 different EV models (globally) by 2025 and has also committed to building hundreds of charging stations across the US. Not all those 50 models will be VW branded, of course, as VW also owns Audi and Porsche.
Audi’s first EV will be the E-Tron Quattro which is expected to be released in 2018 in the EU and 2019 in the US. The E-tron is expected to have approximately 275 mile range. Audi expects to then come out with a new EV each year thereafter.
The first two VW branded EVs are expected to be a crossover and hatchback which are expected to be in production in 2020.
Other more near-term EVs include the Jaguar I-Pace (2019 release – 220 mile range estimate), the Kia Niro EV which is a subcompact SUV (2019 release – 200 to 300 mile range estimate), and the Hyundai Kona EV which is a subcompact SUV (2019 release – 242 mile range estimate). Check out this article for more info on future electric cars.
What Does this Mean for Your Wallet? Tax Credits…
The general price point is known for the Tesla models, the LEAF, Bolt, and i3, but still to be determined for the future models coming out. The E-Tron to be released in the EU is expected to go for around 80K Euros which gives us a sense of what it would go for in the US. But let’s focus on the more mainstream, average American price point of the LEAF (~$30K), the Tesla Model 3 (~$35K), and the Bolt (~$37K). Not too shabby when you consider the average industry wide new car sales price is nearing $37K.
The benefit of buying a new EV is the $7.5K federal tax credit. That’s meaningful and definitely something that would be nice to take advantage of. Check if your state also offers a credit or incentive. Colorado for instance adds another $5K credit on top of the federal credit!
The thing to note though is that the federal credit is available on the first 200K vehicles for each manufacturer, after which the credits phase out. There are two manufacturers in particular who are quickly closing in and expected to hit that figure by mid-2018…GM and Tesla.
The thought behind the credit is that once the 200k car threshold is reached that the manufacturer would have enough scale to reduce pricing and remain competitive, but that is TBD. It could be a big disadvantage for those companies who reach it first but we’ll see very soon how pricing evolves.
Ideally, for the consumer, the battery manufacturers continue to generate scale and technological efficiencies while the federal credits remain available for certain car manufacturers. Theoretically, the largest benefit will be received by the consumer buying the last EV under the federal tax credit by the last car manufacturer.
The other big impact on the wallet is “fuel” efficiency over conventional gasoline powered vehicles. Does it cost less to buy electricity for an EV than gasoline for a conventional vehicle? Yes! How much less? About 70-75% less!!
A few years ago, federal agencies came up with the term MPGe, or miles per gallon equivalent, which is a solution to help compare conventional vehicles to EVs. A gallon of gas is roughly equal 33.7 kWh. For me to drive 1,000 miles (about what I drive in a given month) it would cost me $114.22 in my 2015 Pathfinder as compared to the approximate $30-$34 range for the various EVs on the market today. That would provide over $80 in savings per month, or about $1,000 savings in a year!
My Next Car
With GM and Tesla coming up on their limits under the federal tax credit soon, I may be in the market for a LEAF or one of the forthcoming VWs. Fortunately, besides GM and Tesla, no other manufacturer is on pace (given current run rate) to hit the limit until 2020 at the earliest. Getting an EV for $7.5K off (with the tax credits) while also being a stylish, safe, high quality vehicle from a strong, large manufacturer who will stand behind it sounds like a good deal to me.
I almost forgot to mention, the performance is there too…electric motors provide quiet, smooth operation and stronger acceleration and require less maintenance than conventional vehicles.
All in all, not too shabby. Throw in about $1,000 in savings per year on “fuel” economy savings and it’s a no brainer.
When I do pull the trigger on a new EV, it may be time to get a few more solar panels…:). Getting an EV would allow me to not worry about rising gas prices anymore; and getting more solar panels to power my EV would mean I wouldn’t need to worry about rising electricity prices either. We already know how good of a deal financially the solar panels have been for me so far!
What do you think about EVs? Ready to jump on the bandwagon with me?
Thanks for taking a look!
The Green Swan