By Josh Katzowitz, WCI Content Director
I’ve never been the primary driver of a new car in my life. I’ve been cruising with one hand on the steering wheel and one arm outside the window for more than 25 years, but my vehicles were always used by somebody else before they got to me. Those include a 1984 Chevy Cavalier that my grandparents gifted me when I turned 16, a used 1993 Saturn that I bought for a couple grand in college, a 2003 Toyota Camry that I purchased in 2005 and then drove for the next 13 years, and a 2010 Mazda CX-9 that's still in my driveway.
They weren’t all necessarily beaters (though I might have argued otherwise when I was 18 and the Cavalier’s air conditioning continuously broke during those hot Atlanta summers). But I’ve driven four cars for my entire life. None of them were new.
That’s why the past month has felt a little strange. In June, my wife and I bought a Tesla Model Y. No, this is not an April Fool’s joke. This is the real thing. It’s got that fantastic new-car smell. It doesn’t have dings and dents (yet). It makes me feel wealthy (and a little bit pretentious at the same time).
I realize that Tesla is a perpetual punching bag on WCI. Dr. Jim Dahle fooled much of the audience when he wrote his infamous My New Tesla joke post on April 1, 2021. As he wrote in 2019 in a post titled Why Tesla-Owning Doctors Hate Me, “When I need an expensive consumer item, or car, or individual stock, it comes to mind much more readily than a Bentley or a Porsche or a BMW. So I toss it into the post or the podcast and move on. Then Tesla owners take it as a personal assault on their lifestyle and sound off . . . Yes, you have to drive something and you have to eat something. But you don't have to drive a Tesla and you don't have to eat at a Michelin 3-star restaurant. There is no financial justification to buy this item. None at all. So admit it is a luxury and let's move on.”
OK, OK, it’s a luxury, just like it was when my wife and I splurged on our anniversary dinner last year at Michelin darling The French Laundry. Just like that extravagant meal, we don’t need the Tesla Model Y; we want it. Is it something, though, we can afford?
Here is our justification for it.
We’re Moving to Electric Vehicles
A few months ago, my family took a leisurely walk around the neighborhood, and we included our 12-year-old twins in a debate about whether we should keep the car I was driving and had paid off long ago (a 2010 Mazda CX-9 that was in decent shape) instead of purchasing the Tesla. After all, buying that new car would add a monthly loan payment for the next few years, and I’ve prided myself on driving my cars into the ground so I could defer buying a new car for as long as possible (if you know anybody else that clocked more than 200,000 miles in a Saturn SL2, like I did, I’d like to hear about it).
I was slightly on the side of keeping the Mazda, particularly since we both work from home and could conceivably keep it for another few years. My wife, a quadruple-boarded child psychiatrist, thought we should get the Tesla.
Here was her reasoning:
#1 Teslas Are Less of an Environmental Burden
We’ve been moving away from gas guzzlers. My Mazda got 18 miles per gallon in the city (where I did most of my driving) and 24 gallons on the highway, and in response to that, we purchased a Toyota Highlander Hybrid in 2018 for the better gas mileage and its lessened impact on the environment. Even if gas prices continue to drop from their high summer prices, it made sense to move fully into the electric vehicle (EV) realm with our next vehicle, especially since the cost of charging a Tesla is reportedly nearly four times cheaper per mile than it costs to make your gas car go.
According to my Tesla app, I’m already saving significantly on gas.
#2 There Would Not Be a Cheaper Time to Buy This Car
From the time my wife placed an order for the Model Y Performance in October 2021 to when we actually picked it up in June 2022, the price of the car skyrocketed by about $10,000. We were locked in to the lower price, but if we declined the car, what would happen if, in 2023 or 2024, the Mazda went kaput? The Model Y could be $20,000-$30,000 more expensive than it is now.
#3 The Safety Features Are Amazing
My Mazda had a rear-facing camera and blind-spot recognition. But it’s also 12 years old. The Tesla’s safety features (its eight cameras that provide 360 degrees of visibility, its dashcam, its Sentry mode, its collision-avoidance system, its automatic emergency braking system) are simply not in the same ballpark as the Mazda.
We Save a Bunch
First, a breakdown of how much this Model Y cost us:
When my wife ordered the car in October 2021, it cost $58,440. That was our locked-in price. Now, it costs $68,000. In essence, we bought low. Since we didn’t have a high-speed wall charger, we needed an electrician to wire up our garage. That cost about $2,400, but our city offers a rebate that will cut that price in half.
We also fully fund our 401(k)s and our solo 401(k)s, we both take part in the Backdoor Roth IRA, we fund our kids’ 529 plans, we contribute to my wife’s Health Savings Account, and we put money into brokerage accounts. We pay off our credit cards every month, and the only debt we have is our mortgage (and, um, now the Tesla).
Of course, the Tesla is a luxury item. And as Jim once wrote, “Whether you buy it because it's fun to drive, to impress your neighbors, to save the environment, or some combination of the above, you should only do so if you can afford to do it without borrowing money or impacting your important financial goals.”
Yes, we’re borrowing money to do so. But we’re comfortable that we’re still on our way to reaching our financial goals.
We Have a History of Paying Off Our Debts Quickly
OK, I don’t love the fact that we’re financing $50,000. But we got an interest rate of 2.94% for 60 months, and we’ll have $864 monthly payments for the next five years (for what it’s worth, the average monthly payment for a car in the US has crossed over $700 for the first time as new cars now average more than $47,000).
But we paid off the Highlander Hybrid about 19 months early, and we’re more than double-paying our mortgage every month ($2,200 extra every month), meaning we should own our house several years earlier than our 15-year fixed-rate mortgage is scheduled to end (potentially in 2026 or 2027).
Plus, we’re hoping we can sell the 2010 Mazda for somewhere in the $8,000 range, far above what Tesla offered as a trade-in (about $4,000). We’ll use that to take a significant bite out of our car loan note.
Could we have paid cash for the car? Yes. But since we bought I Bonds near the end of 2021 and then bought more in March 2022 and since we front-loaded our Backdoor Roth IRAs for 2022 and since we sent money to our solo 401(k)s a few months ago, well, we didn’t want to dip into our emergency savings or start liquidating brokerage accounts to buy the car in cash.
Do I love having a large loan on this car? No. Am I comfortable with it, because of our history and our likely future earnings? Yes.
It’s So Much Fun to Drive
Man, the bursts of speed this Tesla provides are fantastic. The computer screen that sits in between the driver and the passenger is a treasure trove of entertainment to those riding in the car (though I’m a little tired of my kids and wife singing Olivia Rodrigo tunes over and over on the car’s “caraoke” system). And hey, not having to spend $50 on gas a couple of times per month is cool.
I wondered what Jim Dahle’s reaction of our new Tesla would be. So, I sent him this photo on Slack, and a few hours later, he responded.
Just because we’re a doctor family, of course, doesn’t mean we should have bought the Tesla. But we thought it through. We're still meeting our financial goals. We think we made a good purchase. And that’s no joke.
What I’m Reading This Week
The Brokerage Industry vs. the Advice Industry
On a recent Bogleheads on Investing Podcast, host Rick Ferri and Michael Kitces talked about the financial advisor industry and the changes that brokerages and other companies are making. This quote from Kitces really struck me when Ferri asked him about the worst part of what’s happening right now when it comes to financial advisors.
Said Kitces, who is the head of planning strategy at Buckingham Wealth Partners:
“The worst of the bad stuff is that the whole industry has figured out that the future is advice, more holistic advice, because I can get a diversified asset allocated portfolio from a platform for 25 or 30 basis points. We ain’t winning on that. We have to find somewhere else to find value. Our regulators are very, very behind on this. There is open broad unfettered usage of titles like financial advisor by people who are literally not in the advice business. Their legal job is to represent their company to sell a product. We see it in the insurance channels. We see it in the brokerage channels. This ubiquitous adoption of financial advisor, financial consultant, and similar-sounding terms from people who are literally a salesperson. . .
The brokerage industry figured out the future is advice before the advice industry figured out how to protect their own space. The brokerage industry is so encroached in the advice space . . . that just confuses the bejesus out of the consumer landscape in ways that, frankly, the brokerage industry benefits from. That’s why they continue to do that.”
As always, if you’d rather ditch your financial advisor and create your own written financial plan, you should check out WCI’s Fire Your Financial Advisor course.
Beginner's Luck?
Here’s an interesting story from USA Today about how one person’s portfolio is actually making money during a time when the market is teetering on becoming a bear. And it’s the part of her portfolio she started when she was a kid and knew virtually nothing about the financial world.
As Elizabeth Buchwald wrote:
“I graduated from an undergraduate business school and I cover personal finance and investing for a living only to have the portfolio I started in middle school beat my portfolio that I’ll one day live off in retirement. But the more I think about it, I’m quite comforted that 12-year-old me is outperforming ‘grown-up' me.”
Is This a Good Idea?
Oh hey, speaking of Tesla, here’s a new way to invest with the company: buy its single-stock ETF. As reported by CNBC, asset management firm AXS Investment is launching a number of single-stock ETFs that include Tesla, NVIDIA, PayPal, and Nike and, according to AXS, are “designed for active traders, traders that are looking to make tactical trading decisions on a daily basis.”
Though single-stock ETFs have become popular in Europe, the fact that these ETFs won’t follow any type of index won’t help investors' portfolio diversification and could lead to more instability.
As the SEC said in a statement, “Because levered single-stock ETFs in particular amplify the effect of price movements of the underlying individual stocks, investors holding these funds will experience even greater volatility and risk than investors who hold the underlying stock itself.”
Money Song of the Week
Jonathan Kolon is a dentist in Utah who also owns a small bicycle business. But one of his true passions is making music. It’s how he paid for dental school in the 1990s, and it’s where he learned that one should NOT underestimate the benefits of putting a few dollars into that tip jar.
That’s exactly the subject for his folk/country/bluegrass band, Mountain Town, when it plays its song Cash Tips.
As Kolon explained to me in a recent email, “The premise is simple, and I tell young musicians that fans want to support you. Get those dollars right now where you can see 'em! And those couple hundred greenbacks you have in the tip jar (or for Mountain Town, we use an empty Old Crow plastic 1/2 gallon) at the end of a night: DO NOT SQUANDER THEM. Put 'em in the ATM the next day and invest in yourself, your band, and your future. I have to cut our wad of cash out of the plastic jug the morning after a show, and many times have thanked my lucky stars because we would have had quite the time at the bar on the Mountain Town dime if the access was easier.”
Check out Mountain Town’s tune, and as Kolon sings, remember that “Cash Tips are the best tips . . . they've always been!”
Tweet of the Week
What happens when one of the best rock vocalists of the last four decades meets with one of history’s most successful investors? Jokes happen, that’s what!
I asked Warren Buffet for an investment tip . He said give me your wallet. He took my money out folded it in half handed it back to me and said here you go you just doubled your money #hahaha #InvestmentTips pic.twitter.com/N0YDKURJfM
— Sammy Hagar (@sammyhagar) July 21, 2022
Apropos of nothing, what do you think the age difference is between Sammy Hagar and Warren Buffett? Probably a lot less than you think (only 17 years).
Is buying a Tesla (or any expensive electric vehicle) worth it? Is financing a new car a bad move? Who tells funnier jokes—Sammy Hagar or Warren Buffett? Comment below!
[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected]]
Good for you, I hope you enjoy it. You don’t need to justify it. Saying it’s less of an environmental burden is laughable, however. And has any 12 year ever said, “no keep the old car, Dad??” Do you know what’s involved to mine the minerals for the batteries? And the electricity has to come from somewhere. I’d also contend it’s no safer than a gas powered vehicle. Anyway, I own Tesla stock so I’m happy. Enjoy the car and don’t worry about justifying it or what others think.
Should we be good stewards of this beautiful planet? Yes. Are we going to be gone in 11 years because of climate change. No. Nuclear war, maybe, but not climate change.
Are electric cars the solution? Well, the electricity generally comes from coal. Aren’t we told to hate coal? And what about mining for the EV batteries. It takes billions of gallons of water, sometimes involves blowing up mountains, can cause contamination of the local groundwater, soil degradation, and a loss of eco diversity. That’s bad, right? And that’s just the tip of the iceberg. When the batteries have to be disposed of, where will we ship those toxic little buggers?
Is our green really clean? Drive a Tesla if you wish. They are super cool cars. But no moral superiority can be claimed.
In 2021 49.5% of power in California was generated by non-petroleum sources.
https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2021-total-system-electric-generation
Lithium mining is a false equivalency. Considering coal would also need to be mined. And we need batteries to decrease carbon production to have a planet to live on. And most lithium is mined outside the US without regulation (maybe we offer incentives for mining safer in the US if that is your “worry”?)
https://climate.mit.edu/ask-mit/how-much-co2-emitted-manufacturing-batteries
Lithium battery recycling is more expensive than mining new lithium. But what is the impact of new oil wells?
Electric cars are helping. Anyone that buys one is part, a very small part, of the solution.
Are you part of the solution in some other way?
How do you it is more environmentally friendly? Honest question. Considering that when you build the car, build the battery, and charge the car from non-renewable resources. And how often do you have to change the battery (~7 or 8 years)? Cost of a new battery is ~$11,000 or $15,000? I assume this will go down, but I wonder if there is a much more detailed analysis comparing the environmental impact of Tesla vs GMC Yukon (extreme example on purpose)?
thank you
My wife bought herself a Tesla Y model this year. We can afford it.
She thinks it’s cool. Me? Whatever makes her happy!
I get a kick out of her frustration at how long the “supercharging” stations take, and how inconvenient it is to plan ahead on trips > 300 miles.
BTW, I’m not yet allowed to drive it. She said there’s a steep learning curve!
Steep learning curve! That’s funny, but a great excuse to give her more time to drive it. It drives just like a regular car, with more slowing down when you let off the pedal.
Haha. Yep, the learning curve was about two days of driving it. It does take a little bit to figure out where everything is on the screen, though.
I can relate to many of the things mentioned in Mr. Katzowitz’s post about buying a Tesla. I’m frugal with cars and drive them for 15+ years. My first car to ever have power windows was a $23,000 brand new 2015 Honda Civic SI which I bought 7 years ago when I was 45. The entire time I was reading this article it appeared to me that Mr. Katzowitz’s feels like he is being “called out on the carpet” and needed to justify his seemingly irresponsible financial decision to buy a Tesla. Some background on me…used to be a stockbroker (noticed I didn’t call myself a Financial Advisor), been in the stock market since I was 22, buy mutual funds and hold forever, and max out every possible legal way to invest in the stock market in tax-advantaged accounts. I am an Anesthesiologist who is married and an empty nester. Barring a bad next 36 months in the market, I will be financially independent by December 2024. Okay, got that stuff out of the way.
Mr. Katzowitz’s story reminds me of something I tried to teach a 20-year-old student nurse recently who loves cars and wanted to buy a nice “fill in the blank” for $27,000. Many young people don’t think about it or realize that their biggest financial mistakes happen when they are young. That $27,000 placed in the stock market instead of a car would be worth about $125,000 by the time she is 40. That’s a $100,000 mistake right there! Of course, I am oversimplifying this picture because she DOES have to buy some type of car at some point in the next 20 years, but this is a simple way to illustrate my point.
My situation is different than that 20-year-old…I am 52 years old and have made X number of wrong financial decisions. However, I have also made X+10,000 excellent financial decisions. I have played the investing game and won. My portfolio is like a giant whale swimming in the ocean and my current financial decisions are like minnows eating off my belly…they hardly even make an impact on my portfolio. I still save about 35-40% of my multiple income sources (real job, side gig, and rentals) but my annual contributions are an ever smaller and smaller percentage of my total portfolio.
In my situation, NOW is the time to make a bad financial decision. And no, I don’t mean a $1MM bad decision. I mean a small bad decision like buying an overpriced new car. Mr. Katzowitz’s provides several financial reasons why buying the Tesla is a good idea. The bottom line is that buying a brand-new expensive car is seldom a good financial move no matter how you rationalize it. If I had written that post, it would have said:
1) I’m a multi-millionaire
2) My portfolio loses/gains more in ONE DAY than a price of a new Tesla
3) I’m buying a new Tesla
4) My net worth just took a $50,000 hit
5) I don’t care
6) I sure love my car
Yes, my post would have been much shorter and less interesting!
The only exception I take to Mr. Katzowitz’s article is that I will only buy an overpriced car if I can pay cash for it. At this stage of my life, I do debt reduction, not accumulation.
Moral of my story: If you have won the investing game, allow yourself to make some decisions that aren’t financially sound and recognize them for what they are…decisions that make you happy regardless of the negative financial impact.
“Money Isn’t Everything” is only true once you have a lot of it…but isn’t that the point of becoming financially independent?
This is my first time posting. I welcome comments.
Scott,
Your post is spot on!
Cliff
I agree. The writer may be able to finance the car, but he can’t afford the car. Everything else is justification. I have a Tesla, but know I can afford the car as I paid cash for the car. I can finance a lot of things, doesn’t mean I can afford the things.
Perhaps the worst WCI article I’ve read. Perhaps we should let the content editor know.
Go ahead and buy a Tesla if you want. Nobody is judging that decision. It’s your money and you’re not going bankrupt from it. The problem comes when you write a financial blog about it when you finance 50k for it. At that point it’s like a bad investment advisor. Because it’s bad advice. If you can pay cash for it (without “dipping into your emergency fund” since I don’t think the Tesla is emergent) fine. But if you need to take out a loan for it it’s not a sound financial decision. Just get a car that’s a few years old for way cheaper that you can actually afford and is still really nice. Or, save up for a Tesla until you can pay cash for it in your budget.
Actually the best option since the car sort of appreciated in value 10k apparently, is to buy it and then resell it for a profit and use that for your new purchase toward a more affordable car.
Love everything Scott said as well.
“Perhaps the worst WCI article I’ve read. Perhaps we should let the content editor know.”
Thanks, EyeDoc! I’ve let the content editor know what you thought of the column.
Scott is right on points 1-6. I bought a Tesla 3 two years ago because my old Infiniti G37 broke down and it would’ve cost half of what it was worth to repair it.
Interestingly enough, my hospital has free level 2 charging (30 miles/ hour) and my HOA doesn’t charge me for electricity in my condo, so I’ve saved a TON in gas. I don’t have to spend time pumping gas, getting oil changes, emissions inspections and doing maintenance. Most importantly, I can use the HOV lanes going to work.
The tesla isn’t as comfortable as most luxury cars. Yes I agree it isn’t as good for the environment as people make it out to be, but I didn’t buy it for wokeness or to show off- I just didn’t want to pump gas and did want to drive fast in the HOV lanes. Parts ARE expensive- I’ve had a broken windshield and broken rooftop each costing over $1000, thankfully covered by insurance.
This IS a stupid article for a financial blog. If you can’t buy a luxury car with cash, get a cheaper car. I also bought I bonds and dollar cost averaged a ton into the market (in 2020 I bought the dip big time- that’s why I got standard, not extended range which was stupid).
As for the Tesla going up in value, I could resell mine at the drop of a hat for $10,000 more than what I paid for it. But this isn’t because of any investing acumen rather than sheer dumb luck. I’m sure all of us would go back in time and buy a dozen teslas if we knew it would go up so much.
I actually think driving in the HOV lane in some locations may be the BEST reason to buy a Tesla or other EV. I have a BIL that bought one primarily for that reason.
Great reply here, Scott. Like you, I drove my old car for many years. I haven’t had a car payment since Steph Curry was drafted in 2009.
I even wrote a post called Rejecting buying new cars has made me richer. I started investing that $448.65 payment instead of giving it to the finance company and over time grew my 401k to $250k.
I prefer a $25k Roth to having a $25k car.
I prefer a$250k 401k to a $250k mortgage.
Just my 2 cents.
I read somewhere that, when considering the environment in deliberations over a new car, the only choice that is truly environmentally sound is not buying a car at all. Having said that, often in this life we are choosing the lesser of evils. The US dept of energy* suggests that about 20% of electricity in the US is renewable, which I guess beats 0% for internal combustion.
I just hope you eliminate all (or 90%) of that extra mortgage payment and put it toward the Tesla (assuming you itemize).
* https://afdc.energy.gov/fuels/electricity_production.html#:~:text=According%20to%20the%20U.S.%20Energy,biomass%2C%20wind%2C%20and%20geothermal.
Cant agree more Scott. I am in a similar situation and I can easily afford a Tesla, but there is no way I can justify pissing that much away on an electric car. I am car guy and have a small collection that has seen a nice uptick over the years. I can think of several better vintage cars that would be a lot better investment than the Tesla. But I guess an old Porsche just isnt woke enough.
Drive what you want, I drive a used Infiniti only slightly slower than your model Y but it also cost only $25K. And I paid cash because financially successful people don’t usually borrow money to buy toys. You can’t justify any Tesla as a smart economic choice. It’s a uneconomic luxury splurge. But don’t get me wrong, toys are awesome, I’ve driven my daughter in law’s Model S, even faster than yours, it was a hoot! But I buy cars with cash, if you can’t easily pay cash you can’t afford it. If you could easily afford to pay cash and just wanted the low interest loan then I retract that statement.
Who cares?
Well, I know somebody who cares enough to write eight letters, a space, and a punctuation mark. So, thanks for caring, Luis.
Good for you!
You don’t need to bring the environment factor as there is a bunch of strong believers who will argue you to the death.
Talk about financial benefits. If you switch from a SUV with 17-19 mpg to Tesla Y and will keep for 10 years your gas savings will be about $40,000.
Your math is a little suspect. 15k/yr at $5/gal is just under 4k/yr, but you still have to pay for electricity. And those numbers assume that gas stays at or above $5/gallon, which it isn’t anymore.
I love my tesla and put a lot of miles on it, but comparing a 5 seater small suv (okay 7 if you have kids without knees) to a 18mpg SUV is unrealistic.
Even a huge Suburban gets 21/28mpg.
Well, it’s my case. Lexus RX was 18 mpg. 1300 miles per month and with $5 gas it would cost $361/mo. Tesla 300 w per mile or 390 kWh/mo. My electricity cost is 10c per kWh so it means $39/mo. Which gives savings $322 per months or $38640 per 10 years
Note that one can buy an electric car without buying a Tesla. A non-luxury car will have the same environmental benefits at a lower price.
The impact on the environment is complicated and not always in favor of the electric option. What is the mix of fossil fuel vs renewable in your power grid? Do you charge at night, when on average there is higher use of fossil sources, or during the daytime, when the grid is cleaner? Do you mainly drive in city stop and go traffic, where regenerative braking has a big impact, or on the highway, where EVs has little or no CO2 advantage over IC engines? Do you live in a very hot or very cold climate, where the efficiency of EVs is greatly reduced?
Most importantly, are you taking the IC car off the road, in which case a direct comparison to an EV is appropriate? Or are you simply changing who is driving the IC car by selling it to someone else? If the latter, then the environment does not care who was driving the car that emitted the CO2. Your dirty older car is pumping out exactly as much GHGs as it was before.
Once you sell the IC car, you are unlikely to know how many miles/day the new owner is driving it. If they drive more than you do, you could have made the environmental situation worse.
It becomes an easier comparison on that measure if you drive the IC car until it is no longer usable. It goes off the road and never comes back, replaced by an EV. Then the comparison is between the EV and alternative IC or hybrid cars.
Apparently, people who buy EVs replace them more frequently than people who buy ICs. This means more production of EVs, which is very hostile to the environment. Replacing one EV with a newer one has no positive environmental impact. In part, one can get around this by choosing a used EV, rather than a new one.
I am not in the market for another car. If I were looking now, I would probably get a plug-in hybrid. That relieves me from concerns about where I can find charging stations. I figure the environmental effect is likely to be small. Hopefully positive but not sure about that.
We drive our cars until they no longer are useful as cars and, we assume, they get used for salvage and parts. Any car we get is simply a replacement and does not increase the number of cars on the road.
Perhaps our biggest environmental impact is that we drive very little. Our driving tends to be slow, with gentle accelleration, avoiding high speeds and gentle braking. That means less power consumption and less wear and tear. That means the total creation of pollution, from all driving sources,.is reduced.
Okay, lots of straw man arguments in this one. First, the grid is not more dirty at night. It is always generating power night and day. During the day in peak times there are fossil fuel generators that make up the difference for peak loads. They are expensive and not very efficient, but are only used for a small amount of time. Your area may or may not have lots of renewable form of energy, but just because it’s night doesn’t mean renewable go to sleep. Wind still blows, water still flows and nuclear still steams. Solar doesn’t shine, but that supplements the peak use during the day.
All cars are less efficient in hot or cold weather, towing etc.
Highway driving in an EV is still more effective than ICE. 300 miles in the model Y uses the energy of 2 to 3 gallons of gas. In the city its better as is driving downhill or with a tailwind, but it’s not bad on the highway.
My comments are not the least bit controversial for those who care enough to look it up. Hardly straw man.
Here is a source. Please post back with your own.
https://pubs.acs.org/doi/10.1021/acs.est.0c02312
Environmental Science & Technology
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Hourly Power Grid Variations, Electric Vehicle Charging Patterns, and Operating Emissions
Ian Miller, Maryam Arbabzadeh, and Emre Gençer*
Cite this: Environ. Sci. Technol. 2020, 54, 24, 16071–16085
Publication Date:November 26, 2020
https://doi.org/10.1021/acs.est.0c02312
Copyright © 2020 American Chemical Society
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SUBJECTS:Fossil fuels,Fuels,Manufacturing,
Abstract
Abstract Image
Light-duty vehicles emit ∼20% of net US greenhouse gases. Deployment of electric vehicles (EVs) can reduce these emissions. The magnitude of the reduction depends significantly on EV charging patterns and hourly power grid variations. Previous US EV studies either do not use hourly grid data, or use data from 2012 or earlier. Since 2012, US grids have undergone major emission-relevant changes, including growth of solar from ∼1 to ∼20% of generation in California, and >30% reduction of coal power countrywide. This study uses hourly grid data from 2018 and 2019 (alongside hourly charging, driving, and temperature data) to estimate EV use emissions in 60 cases spanning the US. The emission impact of charging pattern varies by region. In California and New York, respectively,
****overnight EV charging produces ∼70% more and ∼20% fewer emissions than daytime charging. ****
We quantify error from two common approximations in EV emission analysis, ignoring hourly variation in grid power and ignoring temperature-driven variation in fuel economy. The combined error exceeds 10% in 30% of cases, and reaches 50% in California, home to half of US EVs. A novel EV emission approximation is introduced, validated (<1% error), and used to estimate EV emissions in future scenarios.
I don’t think it is necessary to make any argument about EV cars now. 3-5 years ago may be when was very early adoption. Now with the shortage of EV the more people want it the higher prices will go.
All these arguments will be pointless in 10-15 years. I remember when 1st iPhone came. Slow adoption until about iPhone 4 or 5 generation. How many people have now smart phones vs flip phone or old Nokia style? EV is the future regardless what someone wants
A flip phone doesn’t provide internet.
An electric and petrol vehicle both provide the same thing – they get you from A to B.
Phone is a device to make a call from person A to person B 🙂
Flip phones had internet.
We got a Tesla Y last year and I agree that it is a very nice car. Accelerates faster that my BMW and Porsche, and the electric gadgets are pretty cool. However, the many benefits touted for getting an EV at this stage I believe are false advertising. The environmental benefits are debatable as discussed above. There is also questionable gas/electric savings. When we first got the car, we had planned to get a charger placed in the garage. After finding out it would cost $1500 to have it installed, we decided to try to use the regular wall outlet. It does take over a week to fully charge it on that, but at least we would save the install fee, we thought. Thus, we kept the car plugged in at all times when we were at home to keep it charged. Our first electric bill was $800, up from the usual $200! We found out electricity here in CA is very expensive the more you use. We now try to charge it elsewhere when we can, but still only a bit cheaper than gas, which here is the highest in the nation. They also do not tell you about insurance. I have AAA and found out recently that they consider Teslas to be ‘exotic supercars’, synonymous with Ferraris, Lambos, McLarens, etc. We lease every 3 yrs a new car since it is a business writeoff for my practice, and my wife likes the new things (I know…). My prior insurance on a new, fully loaded BMW X5 that had a higher MSRP than the Tesla was $1500/yr. The Tesla is now $3K/yr! I spent a week calling all of the major auto insurance carriers to get quotes and their rates were not much better. Maintenance can also be more expensive on the Tesla. If anything goes wrong, Tesla parts are very expensive. The rear reflective light somehow fell off and was gone, so I contacted the Tesla service center via their app, thinking a little plastic light piece would be covered under my warranty. Not so! It was $500 just for that. My car is still new, but I am always worried something else might go wrong which would cost an arm and a leg. These electric vehicles are still rather new, so there is no long term data on their durability (low on Consumer Reports so far), and how long their batteries are good for. I cannot imagine the cost of replaced the battery on one of these things, which is another good reason we are leasing it.
Anyway, my point is our Tesla Y is a very nice car with shiny new electric gadgets, amazing acceleration, great sound system, etc. However, do not expect it to be cheaper than gas, save the environment, lower cost to maintain and insure, etc. It is a nice exotic luxury vehicle and if you really want one and can afford it, then go for it. Just understand that it is not a sound financial decision at this time.
You spend $600 per month to charge your Y at home? You sure about that?
It’s funny that there’s still “debate” about the environmental advantages of EVs. The research has been done over and over but here we are rehashing garbage churned out by oil and gas PR to keep everyone just confused enough.
Hey Josh….Like you, I also had a used 1993 Satern SL2 (blue-green). I bought if from the dealership in 1993, as a used car because someone had returned it using Saturn’s return policy. I drove that car up to 180,000 miles, then gave it for free to a co-worker that badly needed a car. And then got it back after about 5 years to give it to my son who needed a car. The odometer broke at around 280,000 miles and my son drove it several more years until the engine just gave out. It was the most basic car I have ever owned, loved the plastic body parts (always looked new)…but I really hated those automatic retracting seatbelts! For the record, we now drive a 2005 Acura TL with only 93,000 miles on it and hope to keep it for at least another +13 years…best car ever!
What’s that? Like 350K miles on a Saturn?!? Good lord, man!
I ended up selling my Saturn to a junkyard for $50. I figured that was as good a deal as any.
On reliability
https://www.google.com/amp/s/insideevs.com/news/550873/evs-worst-reliability/amp/
Electric vehicles less reliable than IC.
According to data reported by Conser Reports, Telsa was the second worse brand in reliability. The model Y was “much worse than average.”
The more expensive EVs had worse reliability.
You lost me at borrowing money for a car. Drive whatever you want but don’t borrow money for it. As a long time fan of this blog, I’m bummed to see the “advice” going downhill so much.
My grandfather paid for every one of his cars in cash. So, you and he are in the same boat, I guess. I figured I’d get some blowback on the financing part of it. That’s OK. I’m comfortable with our decision.
I told you not to tell them you financed it! Now look what happened. “A fan” got bummed and has apparently mistaken your Sunday column for advice instead of entertainment.
If anyone is looking for my advice (which I guess is the “official” WCI advice) on cars, you can find it here:
https://www.whitecoatinvestor.com/quit-buying-cars-on-credit-15-reasons-to-pay-cash/
https://www.whitecoatinvestor.com/how-to-get-rich-by-driving-a-5000-car/
https://www.whitecoatinvestor.com/drive-a-beater-get-rich/
No need to justify it! If you feel the need to justify it, just say ‘I can afford the car and it drives great!’ PERIOD
They are indeed nice cars. I’d still take an ICE sports car over an electric any day if fun is what I am after. For every day commuting I’d take a Tesla no problem if you have solar on your roof.
My only advice is this: as an attending physician, if you cannot pay cash for a car, then you can’t afford that car. Just my 2 cents.
Why is keeping $50-80K cash to buy a new car is a good option assuming a saving account rate 1% ?
If you have to “keep it” for very long, you probably shouldn’t be buying a car that costs that much.
For example, a doc making $50K a month and putting $20K of it toward a new car would only have to save up for 4 months to buy an $80K car with cash. But a doc making $15K a month and putting $2K of it a month toward that car would take over 3 years to save up for that car. I would argue the first doc can afford it and the second can’t.
I think Dave Ramsey has a rule about this. He says you should never have more than 50% of your annual income worth of vehicles (cars, boats, planes, toys etc). So a doc making $250K could have $125K in cars and be okay, but a two doc family making $800K could have $400K in cars and still be okay. I think there’s some wisdom there. I think my family currently has something like 1% of our annual income in cars so I guess we’re doing okay by that rule!
At any rate, my point is that if the cash is only sitting there for a little while there isn’t much opportunity cost to it “sitting in a savings account” and if it isn’t sitting there for a long while, it’s too much car anyway.
My 2 cents
Tesla is over hyped.
Yes, they changed the industry.
However the traditional car makers are fast catching up and they have deeper pockets.
You can get an electric BMW or Mercedes for cheaper and it looks better than boring Tesla
Why pay more? It’s like Apple vs Android.
Android phones work just as well and a fraction of the cost
I am also an EV enthusiast and in the market for an EV.
I currently am a few years out of fellowship, drive a 06 Civic Hybrid that is slowly rusting and at 175k miles on it. Still drives well enough but I have concerns that it will die in a year or two and that creates some anxiety that I will be left with just on the lot (not much!). I have a newer minivan otherwise for my family and mostly need a vehicle to get me or my wife to and from work, occasionally pick kids up or run errands. My minivan is already a PluginHybrid and we have a Level 2 already installed. I also already have solar panels (but no battery system). My commute is 30 miles max and usually less, I see my threshold to get an EV much lower than most people.
What is missing from the above editorial and conversation is that MOST of the benefits that Josh mentions (savings from electric, benefits from charging at home, environmental) are available with alternative products for much cheaper. Currently, the Chevy Bolt is a helluva a deal and soon will actually qualify for all or part of the $7,500 tax credit. The new IRA passed screwed up the tax credit for a lot of great EVs (Kia EV6, Hyundai Ioniq 5).
The Bolt It is definitely NOT a Tesla but doesn’t need to be. It still has plenty of pep with the instant torque that people love about EVs. The range is pretty good, battery tech is inferior to Tesla and the other newer GM and Kia platforms. Also DC-fast charging (Supercharging) is much slower and there is no heat pump. Ther Bolt is definitely is smaller than a Model Y but comparable to a 3. The tech inside of the Bolt EUV is pretty darn good and comparable if not better than a Tesla (Carplay… cough cough…..). Supercruise is in many ways better than Tesla Self Driving (which is still in beta) and available on a vehicle that is 1/2 the cost.
I get that I probably lost people at IRA Tax rebate knowing the income limits. But, for anyone that does qualify, worth taking note that even Tesla and GM will qualify for at least part of it. Lots of ambiguity about the source of materials, etc that may throw a wrench into it, but they are assembled in the U.S. I also get that I lost a lot of people when I am mentioned anything other option than a luxury brand.
I did the math, a fully loaded Bolt EUV after my state taxes and fees will cost me $38,600 without the Tax credit and 31,100 with the full tax credit (or in between for partial tax credit when the dust settles on details). A Model Y without added features (no autopilot, no self driving) would cost me around $70,700. An EV6 is in the upper $40-50k. Even the Model 3 is about $60k after taxes and fees. As I said above Tesla will qualify for some of the tax credit (and if you do too of course). It would be hard to find a gasoline vehicle that has a lot of these features.
I know comparing a Chevy Bolt to a Tesla in some ways seems ridiculous–like apples to orange, and I’d agree somewhat on style, capability, coolness. However, hear me out, a lot to be said about practicality and what % a vehicle actually meets your needs– most people wouldn’t notice the slower DC-fast charging because most people charge at their home or work on a Level 2. Most people wouldn’t notice less range than a Model Y (although a Bolt still has 250 miles of range). The decrease in maintenance cost, decrease in cost of operating will be even better in a non Tesla. Some advantages including some additional tech, ability to take it to a local dealer for any service, and maybe avoiding Elon’s politics. As has been said many, many times, most people buy things to their most ultimate need but in reality very rarely need that capacity (cue the people telling me they need X to tow their boat…).
I’d love to get a flashy Model Y in Blue, but for a savings of 30k-ish for less than 1/2 the cost of a Tesla, being able to pay with cash, still get 90% of what I want, very hard to pass up and hold my nose on a few things that are missing. I can buy snow tires to make up for the lack of AWD. Not as a pretty or capable but it is capable enough.
See https://electrek.co/2022/07/29/2023-chevy-bolt-ev/ for a nice comparison.