How's that for a clickbait title? I have apparently started a lighthearted “brawl” online with Tesla owners. I now get hate mail from them. To be fair, I don't really hate Teslas and it's not REALLY hate mail, but it does make me shake my head a bit and wonder what it is about this particular brand that causes people to go a little nuts.
What kicked it all off is that I often use Tesla as an example in my blog posts. 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. I'm sure this post, in particular, will generate even more of these emails, personal conversations, and comments below the post. In a moment you'll see that I talk about Tesla a lot because YOU talk about Tesla a lot. Here are some fun examples of what I'm talking about from my email box:
The Mail Box
Thanks again for all that you do. My older self thanks you a lot. Had you never started a site and wrote a book, I'd probably be driving a Tesla and have $180k in student loans left.
See, it's not just me. Lots of docs view a Tesla as a colossal waste of money.
Currently, I would say we have loosened the purse strings quite a bit, but only in comparison to the way we used to live—not when compared to some of our friends and colleagues. We love eating out at nice restaurants, and we travel with our daughter as often as we possibly can. I lease a pretty sweet car for $400/month, because I decided that the peace of mind in not having to worry about expensive/time consuming repairs on an older/owned car was worth it to me. It’s no Tesla, but it’s well-appointed and it fit within the budget with which we were comfortable.
This one cracked me up because the doc seems convinced that a car lease is just fine because it isn't a Tesla being leased.
I think this reader was kidding. I think.
I am a 43 year old cardiologist [living] in San Diego (so high cost of living) and drive a Tesla (so spend some money) but also think my wife and I do an OK job of saving. I have always maxed my retirement options and have about $1.3M in retirement accounts, $250K in taxable accounts, and over $100K in each child's 529.
This doc can actually afford the Tesla, but still views it as a luxury. Now let's get into the letters from docs who want me to quit using their favorite brand as an example.
I am sending you this email because of something that irks me. Your advice: books, email letters, blog etc. are all great and have helped a lot of people do the right thing—mostly in regards to financial decisions. I am by far not as savvy as you and have to think most of your advice is really, really great, even if I sometimes disagree with your priorities.
We have decided to invest mostly in ESG funds due to how we believe there are a lot of companies that are not good for our future. A total index fund would technically invest in many of these companies. Even if our very small investments make no difference to the world as a whole, just like my bike commutes and its effect on the environment.
But you on the other hand—your views reach a lot of people and not just physicians; you have become an “influencer”. This is the reason I am taking the time to write this email. You keep bringing up “buying Tesla” as if this is the worst financial decision anyone could make. I know a few things about Teslas and I agree that Model Ss and Xs can be very expensive but I am not sure if people buying Teslas are making a poor decision.
We finally felt comfortable with the price tag and purchased a model 3 with the long range (bigger battery). We paid more than we ever have for a car, but will receive $11,000 in tax credits (Colorado); the car cost us $60,000. That puts the car in a more normal nice car price range, after tax credits. We can look forward to minimal maintenance and electricity is cheap compared to gasoline.
Maybe the Tesla website is misleading since it compares their cars to 20 mpg cars, and many Tesla purchasers owned Priuses and other types of fuel efficient vehicles previously. With the inversion and horrible air quality we see where we live, this is again one of the things we can do to make a small difference when driving in the city. When going to the mountains to have fun, we also don’t leave the same carbon-footprint behind.
I think cars that are more fitting to “bash” are Range Rovers, Bentleys, any expensive truck (Raptor?), Lamborghinis etc. I can give you more examples if you need them. If it was up to me every listener of your blog would buy a Tesla or another kind of electric vehicle.
I really like this one because not only does this doc want to justify this purchase to me, but seems to want me to convince all of my readers to buy Teslas. The next email came in after I mentioned on Twitter that I get Tesla “hate mail”.
Hello! Love the website, longtime follower. I think you probably get Tesla hate mail because your articles that mention them seem to focus on it only being a status symbol and it being unreasonable priced. I’m a first year attending (wife in residency, HPSP), paying loans back on a 5 year repayment plan. High cost of living area, maxing all retirement accounts/IRAs, and putting money into taxable index fund accounts. My first purchase as an attending was a Tesla. It’s one of the safest cars on the road, I use it every day, and it’s truly a joy to drive.
Is 50k expensive? Absolutely, but you have to drive something, and it took less than 7 months to pay off while also doing all of the above. Tesla owners understand it’s not the most fiscally responsible thing to do, but they’re priced now to the point that it isn’t unreasonable. The difference between a new Model 3 (starting at 32k after tax rebates) and the 3 year old civic you would recommend (10k?) is a lot of money, but realistically 25k isn’t that much for a 6 figure income when you figure you’ll drive it for 7-10 years. And it’s WAY more fun to drive.
Hopefully this doesn’t come across as hate. But your articles tend to make it seem like Tesla owners are all dropping 100K+ on vehicles they can’t afford and are doing it just for the status. That’s just not a fair description.
This one made me laugh for two reasons. First, because the doc admitted buying his Tesla on credit in his first year out of residency while carrying student loans and second because he somehow decided a 3-year-old Civic is my recommended car for him.
How I Really Feel About Teslas (and Other Expensive Items)
I don't care if you buy a Tesla. I really don't. I also don't care if you buy another expensive car. Or a wakeboat. Or go heli-skiing each year. But you need to understand that they're all really the same thing. Luxuries. They're NOT transportation (mostly). Reliable transportation costs $5K. If you have to borrow to get reliable transportation (and as a doc this should be an exceedingly rare event that only occurs early in your career) then go ahead and borrow $5K.
What does $5K get? It gets you an 8-year-old Nissan Sentra with some scratches in it. It's not flashy, but it'll get you to work and the grocery store. It will almost surely last throughout your residency and/or the 2-5 year Live Like a Resident period that will ensure you will become a wealthy physician. It will give you plenty of time to save up to pay cash for your next car, whether it be a $10K 3 year old civic or a $120K Tesla X.
So, if $5K is reliable transportation, and you're looking at a $100K Tesla (or the “$32K Tesla” mentioned by the emailer above), then you are buying the following two items:
- $5K Basic Transportation and
- $27-95K Luxury
That's just the way it is. So quit pretending it is something else. It isn't. 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.
Luxuries Are Fine…If You Can Afford Them
I don't have a problem with you buying luxuries. I really don't. I buy luxuries. I now spend tens of thousands of dollars every year on vacation. By definition, going on vacation is just pissing money away. That's why vacation insurance makes me laugh too. If you need to insure your vacation, you probably shouldn't be taking it.
My family buys luxuries all the time. My wife drives a fancy SUV with Bluetooth, leather seats, and all kinds of safety features. It costs more than some Teslas. She also has a sweet wake boat she lets me use sometimes that cost even more than that car. Sometimes we use a helicopter to go skiing just so we don't have to ski over other people's tracks through the snow. All of those things have similar annual expenses when you take depreciation into consideration.
But guess what? We can afford all of those luxuries. How do you know if you can afford something? Because you can pay cash for it. It's really very simple. As Steve Martin now knows, “Don't buy stuff you can't afford“. We can pay cash and still be on track to meet our financial goals. (In our case, we're already financially independent so technically we can afford to spend 100%+ of our income each year on luxuries.)
If you are in a similar position, go buy your Tesla and enjoy it. Enjoy how fast it goes. Enjoy how wonderful it makes your commute. Enjoy how good it makes you feel about reducing smog and saving the planet. Park it out front so the neighbors can see it if you're into that sort of thing. (Although I'm sure no car owner would ever admit that is part of their motivation for buying it even though they think it is for many other people buying the same car.)
Saving the Environment
A Tesla, unlike a Bentley or a Range Rover, is a dual-status symbol. Not only do you get to say “I have more money than you” but you get to say “I care about the environment more than you”.
Let's set this environmental argument upon the table so we can all peer at it. First, we'll assume that buying a brand new electric car and ditching your old gas-guzzling sedan is actually good for the environment, although there are some arguments out there that this may not be the case. (That sentence is really going to get you Tesla owners fired up!)
That assumption out of the way, let's examine this argument more closely. Here's the argument: “I'm buying a Tesla to save the environment”. The problem with the argument? It's a false dichotomy. Supposedly the only two options are to drive your F250 with a bad catalytic converter to work or to buy a new Tesla. There are more options:
- Move closer to work
- Ride the bus
- Carpool
- Get a bike and ride that ($500)
- Get a really nice bike ($10K)
- Buy a 5-year-old Prius ($12K)
- Buy a brand new Nissan Leaf ($29K) or Chevy Volt ($32K)
- Buy a bare bones Tesla 3 ($43K)
- Buy a Model X P100D with Ludicrous Mode ($155K)
Which one is best for the environment, your health, and your budget? There are at least 5 options on that list that are better for the environment than Ludicrous Mode. There are also 2-3 of them that are just as good for the environment and also provide similar basic automobile transportation at a fraction of the cost. Even if you don't care about the health benefits of cycling, if you are trying to save the environment AND make a smart financial decision, you probably should not find yourself at the bottom of this list.
A Few Thoughts on Tesla Stock
I also use Tesla as an example of an individual stock. Personally, I think picking stocks is stupid. It adds uncompensated risk to your portfolio (any risk that can be diversified away has no expected additional return). It's not particularly fun and when you consider how much that hobby costs, I don't think it's fun at all. Would you rather lose $10K a year in opportunity cost or take your kid heli-skiing for a week in Canada? Easy choice for me.
What do I mean the hobby costs a lot? Well, you can't pick stocks well enough to beat a boring old index fund that just buys all of the stocks at a very low cost, especially when you consider fees/commissions, additional taxes, and most importantly, the value of your time. So the difference between what you would have earned in index funds and what you did earn picking stocks is the cost of that hobby.
Oh, you think you can beat the market? Then why are you only managing your own money? If you could reliably beat the market by 1% a year over the long run, you should be managing BILLIONS of dollars, not just your own $250K portfolio, and charging “2 and 20” to do so.
Tesla stock is not somehow an exception to the rule.
This is a chart of Tesla stock (dark blue) against a Total Stock Market Index ETF (light blue) over the last five years. Not only did the overall market outperform, but it did so with dramatically less volatility. Trying to pick stocks well enough to beat the market is a fool's errand, even if “everyone knows this company is going to change the world” and even if the company outperformed the market in the past. I have no idea how TSLA will do in the next year or the next 10 years. Maybe it will beat the market. But you'd be stupid to bet a large chunk of your portfolio on that happening.
The Choice is Yours
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood…I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
—Robert Frost
My climbing partner is on his second Tesla. Sometimes we take it to the crag. Sometimes he leaves it in my garage when we go on a climbing trip in my car. He commutes an hour to work 16 days a month, working 9-12 hour shifts at all hours of the night. He finally bought life and disability insurance about the same time that I canceled mine. Thanks to a nice physician income, he will probably have enough to have a nice retirement at traditional retirement age.
I work 8-day shifts a month at a hospital 16 minutes away by choice. I never work after 10 pm (and could make that 2 pm if I wanted). I go on vacation every month. I could buy a Tesla every day this week with cash.
Although they do not lead to the same place, we're both happy with the choices we've made. Now it's your turn. Which path will you choose? Will you use that extra $100K you made between residency graduation and Christmas to pay off your loans, or will you use it to enjoy Ludicrous Mode and speculate on Tesla stock? Choices have consequences, like two ends of a stick. You can't pick up one end without picking up the other.
But let's be very clear about Teslas. 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.
What do you think? How did Teslas become such an important status symbol among doctors? Which model do you drive and why? Do you think it's okay to buy an expensive car and individual stocks in order to help save the environment? Comment below!
So many truth bombs Doc! It’s just another form of luxury, but in America cars are in a separate category because Americans worship them, so it’s a special kind of luxury that is meant to be worshipped in special way. I don’t hate Tesla’s either I think they’re actually kind of cool, and if someone can afford one, like you said, great.
But the whole “I’m saving the environment” thing is tiresome. You want to save the environment? Don’t use a car and bike or walk. Now you’re making progress. We don’t need millions of additional batteries with toxic chemicals introduced into the world. Plus Tesla’s have the same polluting tires and give off the same toxic brake dust and other chemicals that other cars do. The bottom line is there’s not much about driving a car, be it electric or gas, that’s good for the planet or anything really.
Agreed! You forgot to mention the electricity to charge the (toxic) batteries must come from somewhere!! Just because the Tesla doesn’t have a tailpipe doesn’t mean it isn’t leaving a large carbon footprint—especially when driven in ludicrous mode!
Having a Tesla is not a bad thing. It’s a great car and if you can afford one pls buy one. Most doctors spend a lot of money on other irrelevant things like eating out, buying second homes, drink wines instead of eat grapes etc. If ppl don’t buy Tesla how will makers of Tesla get money to run the company. Also Tesla is a better car than Mercedes benz, Lexus and bmw. It’s relatively cheaper than those cars. But then men are fixated in their thoughts . The new fixation is Tesla , Tesla , Tesla . Men!!
There’re different degrees of trying to be responsible environmentally. Just because a person wants to do this does not mean they’d have to change their life completely and live like a hermit. This argument of walking/biking is not a very good one if you end up with a job in which you need to drive.
It’s more of choosing an alternative. You can throw your water bottles away in garbage to be hauled to the landfill or you can put it into the recycle bin to be reused. This is what the EV drivers (not specifically Tesla) are talking about.
Funny you mentioned recycling. Planet Money just had a piece that suggests it is FAR more environmentally wise to send the plastic water bottles to the dump than the recycling bin (where they end up in the Pacific when they are dumped overboard on their way to China.) Better yet just to not buy lots of drinks in plastic bottles.
You should update that article with the TSLA and NIO stocks rises.
I have an ETF portfolio down 2% over 2 years and a Tech stock up 1000% over 2 years.
Those tech stocks paid fully for my Model 3, Model Y and Cybertruck reservations. 🙂
Only buy luxury when you are financially independent, I fully agree.
Congrats on your success. I’m surprised you didn’t post this on March 20th. 🙂
I love the article but I still plan to buy a Tesla. I can afford it. Even if I couldn’t afford to pay cash my younger self would still be tempted by the current Model 3 prices. If winning the race to FI involves 8 year old Sentras, then I am fine not being the first to cross the finish line.
I like that last line. The truth is there isn’t all that much benefit to FI if you have no interest in RE.
Well, even if you have no intention of RE, FI gives you the option to say FU if the need arises.
In terms of environmental impact, high-income professionals could do a lot more things that don’t involve luxury spending – cut back on taking vacations involving planes/helicopters, cut back on ordering things you don’t need from Amazon, cut back on using (or paying someone to use) a gas leaf-blower, buy green energy for your house (including community solar), eat less meat, and having fewer children (which I don’t advocate but doing so will surely save you a lot of money).
I bought a brand new Tesla (Model S 90 D) 3 1/2 years ago. I was in a great financial place and had been wanting one for several years before that. Paid for it in cash.
My previous daily driver car was the brand new Mercedes 2004 C320 I made a mistake in buying finishing up my fellowship (had to take out a bank car loan for 5 years). The saving grace from that mistake was I drove it for 11 years and over 230k miles.
I am a huge fan of Tesla. It is definitely a luxury purchase and I am good with that. I do not plan on being the richest man in the cemetary and for some things I do go overboard (fine dining and vacations are other things I have no problem dropping a lot of coin on).
Yes if I was on the environmental kick I could go with a prius or some far less expensive electric vehicle and get the same bang for the buck. Every benefit of electric can be had at a lower cost point. But that could be said for almost everything. Do you need a 4 figure or even mid 3 figure watch? A timex keeps way better time than my rolex (I got it as a wedding gift, probably would have never bought it myself) and cost $20.
How bout clothes? Do you need to spend $60 or more for jeans with a fancy logo or a horse symbol on your shirt? Can easily get clothing for $3-5 if you want. But at some point you do want to spend something otherwise your heirs will be the ones that benefit for all that sacrifice.
As far as status symbols go, I do think Tesla does a lot better with public perception than a gaudy Lambo or Ferrari or even a Porsche. Not quite stealth wealth but I feel it doesn’t draw the ire of the general public.
Expensive car(s)
Big house
Large student loans
Private schooling
Country club memberships
Luxury vacations
Relatively poor compensation
If you pick one or 2 of these you will probably be fine. However they tend to run in packs.
I love that–they run in packs.
…Congrats on your soon-to-be “most commented” blog post 😉 But it’ll be hard to top the backdoor roth post, haha!
Tesla won’t be in our future because we’ll be looking for an SUV/crossover in a few years and don’t like the design of the X or Y. I suspect we will get a used Rivian (if they pan out) or an EV from a mainstream existing company like VW (even if in concept stage now) after being out for a few years.
The whole debate is comical to me. The Elon personality cult. The idea of individual Tesla stock as an “investment.” The anti-EV fanatics. The people who drive gas cars who like to talk about how they love the smell of gasoline (???). The judgmental attitudes. The reliability debates and brand wars. Its all so silly and highly emotive.
In the “physician world” bubble, Tesla is an easy target. For the vast majority of folks, brand new expensive trucks, car leases, and even buying a Civic on credit are much more pressing issues. I think it helps for all sides to keep this in perspective.
Your note on environmental impact shows that the issue of climate change is much more than individuals making choices with their wallets. A lot more needs to be done structurally like power grids and environmental protection. Don’t kid yourself that you’re personally saving the world, even with a bike commute or used EV. Cutting back on meat consumption and shopping locally are great individual choices, too, but the most important thing to do is vote wisely to ensure good stewardship of our planet’s resources.
So right. Still, we have a large solar array to power our geothermally heated/cooled old renovated house and feel good about contributing at least that.
“Vote wisely” Is the most important thing we can do really? Totally disagree. Passing the buck to government officials IS the last thing I would do. Individual responsibility and behavior is by far More important factor.
Freedom of choice is fine with me.
Everybody can pick how they want to spend the money they earn.
I do not believe the government can solve all problems.
I will not vote for politicians whose solutions are to tax me left, right, up, down, in, out, sideways, diagonally, north, south, east, and west.
I don’t need people who fly private jets to Switzerland to tell me that I can’t eat a hamburger, should not drive a truck, or that I should pay 80% taxes to fund their “program” that will likely fail just like the war on poverty, the war on drugs, etc.
If you want to ride a bike, ride. If you want to use a helicopter to commute, have at it.
As long as you don’t ask me for any money, I do not care what decisions you make regarding how you spend your money.
amen.
Welp….clearly from these replies we’re doomed
Another one of your’s the I put in the “awesome” category. As a previous commenter said “truth bombs”!
My husband always says the most environmentally sound car choice is to NOT buy one! (and what everyone who buys tesla’s or any hybrid ignores, is the environmental impact of all the raw materials and manufacturing that goes into building the car itself).
Excellent point I should have mentioned in the post.
I was kidding, but I want that car lol theres a nice grey one in our drs parking lot. soon it’ll drive me home after a tough day of radiology
My neighbors (two docs) both have Teslas. They have solar on the roof. My brother owns a plug in Prius. He came to visit and parked on my driveway. My neighbors got excited “Oh you bought a plug in hybrid! How nice.” IMHO Teslas are all about virtue and money signaling. If you want to just virtue signal, buy a plug in Prius. I am slightly embarrassed to say I still drive a 2008 Toyota Tundra, a political liability in California, almost as serious an offense as a MAGA sticker on my vehicle. But it has 4WD and is a good way to transport racing kayaks in the summer and skiers in the winter. I do not plan on getting into a MVA, but if i do, the Tundra will probably lessen the impact on my body parts, and according to my mom, that makes it safer for me and family. YMMV!
environmentally responsible automobile is an oxymoron, on par with quality airline food and stress-free relationships.
Haha, good one!
The environmental argument evaporates if one is getting rid of a car that still has life in it. YOU may no longer be driving it, but someone is. It will pollute just as much when driven by the new owner as when driven by you. You don’t see it, but the pollution effect is the same.
If you retire a car that has reached end of life, so that NOBODY will be driving it once you are done, then you are making a positive contribution to the environment by getting a fuel efficient car.
That fuel efficient car need not be expensive, new, or a luxury car.
No matter what kind of car one has, driving fast is less efficient than driving responsibly. It is also often illegal.
As for fast legal driving, it depends on the roads on which you drive. I can go for months without driving on a street where it is legal to go 55mph. I do not believe I have been on a road with a speed limit higher than that so far in 2019. In order to benefit from a car that can do 0-60 in under 3 seconds, I have to have an opportunity to start at zero and end up doing 60. I rarely go as fast as 60 and when I do, it is on highways where I do not make a standing start. I have no need to accelerate that fast and I have rarely have the opportunity to drive that fast.
I have no use for a ludicrous mode.
At least other expensive luxuries- watches, jewelry, art, fancy vacations, do not involve endangering the public with irresponsible behavior.
I have some really bad news about the idea that jewelry does not “endanger” anyone…
https://www.nationalgeographic.com/magazine/2009/01/gold/
https://time.com/blood-diamonds/
Yes, Josh. That lit up like a neon sign when I saw it !
I’m a Tesla Model 3 owner, I love it, but I disagree with almost nothing in this post except one thing: a $5k 8 year-old Nissan Sentra does not sound like a cheap car to me. Maybe to acquire it, but not to own and operate it. The hassles of repairs and maintenance are very real (as well as time out of your day to take it back and forth for this). Among the really nice things about electric cars are that they are simpler to maintain, electric engines are robust, and electricity is cheaper and less volatile than fuel, and so therefore they are cheaper to operate. Probably the cheapest, most environmentally friendly thing you could do (and endorsed by MMM) is to live close to work and buy a used Nissan Leaf.
This is what we realized when we needed to replace a car during residency. We could certainly spend only a few thousand. We found a private seller willing to part with a 10 year old Subaru for what sounded like an incredible deal. We took it to the auto shop before the deal and found that necessary repairs would cost as much as the price we were about to pay!
I always question “necessary repairs” that you needed a mechanic to point out. I mean, the truly necessary ones should be pretty obvious!
Transmissions ain’t cheap. Maybe my experience was rare. The car drove fine around the neighborhood and sadly, we didn’t notice a slight humming while parked. I’m truly grateful for our local mechanic and family friend of 20+ years for helping us out. This little anecdote simply taught us that the cheapest option can sometimes wind up being costly. I don’t feel guilty about not noticing anything wrong myself. I’m actually happy with our decision to walk… avoided a money pit and maxed out our Roths the following year because of it!
I think you’re GROSSLY overestimating the amount of time and energy/repairs and maintenance that goes into an 8 yr old car.
It really depends. The classic example is the 97 Mazda 626 I bought in 2006, drove until 2010, sold it for the same price I bought it for, and replaced the windshield wipers (once), the battery (once), and put two used tires on it. I would expect to spend a bit more on maintenance for an older car but lots of people simply haven’t driven cars with 150-200K+ miles on it and make a lot of assumptions about what it really costs on average.
I’ve never owned a car younger than 8 years. My current truck is 19 years old, and I do nothing more than oil changes and brakes. The trick is to buy a car with good maintenance history with just over 100k miles (AFTER someone else has done the expensive maintenance) then sell them around 170k miles. My wife on the other hand “doesn’t trust” an older car and wants peace of mind. We spend more money following the recommended maintenance on her 6 year old car than we do on mine!
My Kia Sorento is 7.5 years old and just crossed 100k miles. It runs fine, no major repairs. Alternator did go bad and was covered by the Kia extended warranty they snookered me into when I bought it — so far that is the only thing I have used the extended warranty for in all this time.
Tesla is great for the environment? Where do you think the electricity comes from to charge the battery? From coal!
Mine is from solar panels. Western states use mainly hydropower, many east coast states use natural gas. It had been shown many times before that even coal made electricity for Tesla has less CO2 emission than gas cars (and don’t forget about amount of energy to make gasoline from oil and to transport it to a gas station).
See my comment #20 below. You fail to consider the much greater CO2 impact of the battery manufacturing. That alone destroys any CO2 benefit of the Teslas, to say nothing of the unknown impact of the disposal of the batteries [and our solar panels].
Humans are among the biggest CO2 producers, if not the biggest. What next, cutting back on breathing?
Look, electric cars are the future you want it or not. You can get it now or in 20 years it is your choice.
What will be the energy source for all the electric cars? Windmills?
Seriously? Same German companies that are paying billions for diesel scandals are better? When you will start your diesel Mercedes in garage this winter enjoy the smoke and tell your kids it’s less harmful than electric car 🙂
Electric is the future only if you bury your head in the sand and ignore the full environmental impact of electric vehicles, much of which is not known.
1. Yes even the dirty diesel beats the total CO2 impact of electrics.
2. I don’t own a diesel.
3. Europe is rolling out a new, cleaner diesel, DME. May come to US.
Similar flawed analysis supports wind power, at least as to CO2. Turns out manufacturing those huge turbines creates more CO2 that they will save for hundreds of years. The least environmentally harmful power source remains nuclear [even more so if we can ever get to fusion]. But the public has been brainwashed about the nuclear waste problem, which was solved decades ago.
The whole CO2 debate has been massively misdirected because the total of all CO2 from human activity [“anthropogenic CO2”] is not even in the top three categories of CO2 sources, according to the IPCC reports. And the larges component of anthro CO2 is 3d World homefires. So the amount of CO2 over which we have any control is miniscule. However, we have much greater ability to capture carbon, as noted in a recent article by the Union of Concerned Scientists. To the extent CO2 is a genuine [and not political] problem efforts to increase vegetation, carbon sequestration, and carbon farming could a much greater effect on CO2 levels. But we don’t seem to be capable of honest political/scientific discourse.
William. Quite a few bombshells in there, that even the MSM would report on if from respected reliable sources. Can you take the time to please cite the Source, Article / Page etc and quote them as applicable? Such bombshells deserve to be reported on if true.
The CO2/GHG sources and %’s are spelled out in the IPCC reports. They are available on-line and in books. Unfortunately, even when I cite them to MSM, the response is mostly blank stares or the cyber equivalent.
Dave, I should have mentioned a good example of how the MSM ignores stories even with a huge impact. After the Parkland shooting, I wanted to know the full impact of mass shootings. I found a Wash Post article that reported the total number of deaths from mass shootings since the Texas Tower shooting in 1966 was 1077 in the 52 years, or 20/year. Consider that we lose 22 veterans EVERY DAY to suicide, 400X the problem of mass shootings, but the media reports nothing. Just yesterday I read a national article about suicides; it mentioned many groups, but not veterans, the group with the highest % incidence. Just one example, but MSM is very selective and disproportionate in coverage. So why b other with another example that conflicts with their preferred narratives.
[ad hominem attack deleted]
1. It is not true. The article you are referring published by Germans was not peers reviewed and used absolutely wrong assumption by factor 5-10.
2. 🙂
3. DME is a chemical product and will require the energy to be produced. It is only half the energy density of diesel fuel so twice large tank will be necessary. It has be known early then first Tesla S hit the market and still nowhere available despite strong push from German chemical industry.
In general, not arguing that stated information is wrong, most western governments including Europe, will generally support toxic production in China or Africa and will use clean products (wind, electric) at home.
1. Not peer reviewed does not = wrong. What assumptions are wrong? They may be wrong, but at least they are attempting to look at the total impact. Show me any research does such a total impact analysis of electric cars.
3. Yes, but that is why they are looking at the new engine I mentioned; a major CA university concluded that engine will be 83% more efficient, more than offsetting the lower density.
However, the foregoing are all relatively minor issues. The major error is that policy is oblivious to the fact that most of the major categories of CO2 production identified by IPCC cannot be addressed. E.g., the single largest CO2 source category is primary production, the breathing of all living creatures. Not until the 4th IPCC category do we reach the total of anthropogenic CO2, and as noted, the largest component of that lies outside the US. So controllable CO2 emissions seem to be under 5% [some estimates are well under 1%]. That is why I suggest that it would be far more effective to address carbon capture. [Ironically, the one proposal about 3d World home fires was Tillerson’s proposal for a major electrification program for the 3d World.]
An added factor creating confusion is ignorant statements by leaders. E.g. current/former CA Govs and AOC’s Green New Deal call for a 30-50% reduction in greenhouse gases. that fails to realize that IPCC show that 70% of GHG is H2O. They may have been referring to CO2, which is obviously a subset of GHG, but the idea that there can be a 30-50% reduction in GHG is simply mathematically impossible.
I want to second the idea that carbon capture is the best solution for CO2 reduction in the atmosphere. The reason it is ignored is that the Left is receiving political donations ($$) from the alternative energy companies while the Right gets their $$ from the traditional oil, gas, coal industries. I cannot figure out a way around this, both groups dislike carbon capture and there is no money coming from an industry that has no money to give. This is a failure of our political system. I like Capitalism, but it is not perfect.
1. For example, they assume that electric car batteries become “hazardous waste” after 150,000 km or ten years, which simply isn’t the case. 150,000km is shorter than the warranty period for an EV battery (generally 100,000 miles or more in the US, which is 160,000km).
Virtually all automakers working on electric vehicles are also working on recycling the batteries since they are going to still be extremely valuable after being depleted. And lithium ion batteries do not have a hazardous waste designation in the US – however, the lead acid batteries in every diesel vehicle do.
They are also making many other mistakes, like using the flawed NEDC driving cycle, which is being phased out. They assume unrealistically optimistic numbers for diesel emissions, and unrealistically pessimistic numbers for electricity emissions.
One of the biggest mistakes they are making is that they are comparing the full production and lifecycle of an electric vehicle, including the emission from the electricity uses, against the production and lifecycle of a diesel car without accounting for all the energy used to produce the diesel and supply it to the cars.
Oil spill in Gulf of Mexico had probably more impact on environment then all manufactured electric cars up to date.
Misinterpretation of data does not make facts. For example, more people died from electric shock caused by appliances then from snake bites. So, conclusion: toasters are dangerous and need to be restricted? IPCC clearly states that burning fossils is the factor for global warning and it can be controlled. Please read the report available online not the interpretations from pseudo-scientific websites.
DME is a deadend: available since 1992. California APPROVED it for use in 2014. Do you see many stations there? Even Volvo as major truck player originally had been targeting 2015 to begin production of DME trucks in North America but subsequently decided not to set a date. Now Volvo focusing on electric trucks.
“1. Not peer reviewed does not = wrong. What assumptions are wrong? They may be wrong, but at least they are attempting to look at the total impact. Show me any research does such a total impact analysis of electric cars.”
Here is the research:
https://www.sciencedirect.com/science/article/pii/S2542435119302715
Thanks, that is an interesting article that attempts a comprehensive analysis. It fails to note that current recycling levels are <5%; of course that could increase. It also fails to account for the increased environmental restrictions on e.g. lithium production. And it fails to note that 70% of GHG is water vapor.
My main disagreement with you is in your prior post, although it may be semantical. You state that IPCC states that "burning fossil fuels is THE factor for global warming"… If you mean by "the" = predominate, that is not what IPCC says [on-line, not secondary]. Burning fossil fuels is part of the anthropogenic CO2 category 4th in effective. As I noted, IPCC notes primary production as the #1 category. Interesting that in discussing the "hockey stick" rise in CO2, no one bothers to note that at the start, there were 1 billion humans; we did not reach 2 billion for 123 years. But 96 years later we are near 8 billion. That rise almost exactly matches the CO2 rise. Not proof, but at least worth considering.
And no, DME is not dead. The new engine I mentioned with its big improvement in efficiency will be able to use DME or LNG/CNG, or even biodiesel. Let's face it, there are so many ongoing developments, that it is hard to say where things will end up. If we ever perfect fusion, that may be the best solution.
Look, I did not say fossil Co2 is “the predominate” source. Human actually produce more CO2 then cars by burning fuel. The main misconception is what is the source of the fuel. Human fuel is mainly carbs produced by photosynthesis (now, this year) from CO2 and H2O. Human CO2 is the cycle not a waste. So, unless people start to use oil/NG as a source of energy there is not concern. Cars, on other hand, use oil/gas which is captured million years ago CO2.
Logic/ math is simple. Let say 1B human breath out 1% CO2, so 8B should do 8%? No, we don’t see it. But there is linear correlation between annual production(use) of oil/NG/coal and raise of atmospheric CO2.
Earth atmosphere and o2/CO2 circulation is a close balance cycle. Adding even small amount will disturb the balance. Example. A human needs about 2000 calories per day. Let say we add 10% extra (2200 cals now). A body will use it initially but then will store it which will lead to obesity (and later hypertension, diabetes, and eventually early death).
I see DME as a temporal patch to use cleaner NG (for synthesis) then oil. That is why no major company wants to spend billions on some temporal solution that will need to be replaced.
Reality Check https://www.scientificamerican.com/article/earthtalks-volcanoes-or-humans/
My 1998 Tacoma has literally never had a single problem in 21 years. So bare bones simple, there’s nothing to break. I park it anywhere, never lock it, and never worry about it. Last weekend a bear scratched the tailgate. Oh well! But when we finally reach level 4 autonomous vehicles, I will happily roll my old truck off a cliff and drop $80K for a car in which I can sit in the back, sip a martini and watch cat videos while it gets me home safely after a late shift.
I recently had the zero fun experience of having to buy a car. I went with a used 2015 Prius because of their gas mileage and reliability. I was hoping to spend less than 10k but ultimately paid 15k for a certified vehicle because of my general lack of functional vehicular knowledge and the overwhelming desire to not have to replace this car anytime soon.
After my wife gets her license we will probably become a 2 car family. I think a nice used Nissan leaf will do the trick.
I def want a Tesla for all the reasons that people want them….but it will have to wait for all the reasons luxury purchases have to wait when FI is on the offing.
I am not a Tesla-driving doc and I am not advocating them by any stretch. However, not every car that costs over $5k is a luxury- this is another false dichotomy. Some dollars spent over $5k are buying luxury for sure, but that is not the whole story.
1) A family of six pays more to have a car with a third row- is that a luxury? Not for them, it is a necessity.
2) A doc who lives in a snowy region of the country pays more to have all wheel drive. Is that a luxury?
3) A parent who values safety spends significantly more on a vehicle in order to have automatic emergency braking. Is that a luxury? Tell it to the people whose lives have been saved by it. This one in particular is going to be a game changer over the next few years and will make a very strong case against buying a beater.
Cars are an easy target for those who like to judge, but there are a lot of good reasons to pay for them other than luxury.
https://medford.craigslist.org/ctd/d/medford-2005-nissan-pathfinder-4×4/6916876357.html
4WD, high clearance, seats 7, $5999 list price. 2/3 ain’t bad.
A 20% premium over a non-luxury car. For shame!
Shoot….my 2005 Sequoia is going to be a $5K car soon isn’t it? Maybe it already is with the dents in the bumper.
Good point — I’ve noticed that too just looking around. $5k for a car is purely an arbitrary theoretical number… and in reality I’ve seen the “cheap end” for car shopping increase over the years with the simple reality of a continual rising cost of living.
What gets me about the car shopping discussion is how much people judge others and criticize. Where a $25k car purchase faces as much scrutiny over supposed extravagance as someone getting a brand new Tesla Model X. Good for you if you drove you car for 250k miles until the wheels fall off… But never forget that your experience is only one of many!
I disagree. If I had argued for a $2K car, I think your arguments hold water. But at $5K…not so much. You can get a third row 4WD for $5K and expect it to last 2-5 years. The safety thing is a tough one to crack because the only way to have the utmost in safety is to buy a new car every year or even more often. But the truth is that the likelihood of that additional feature actually saving your life is so incredibly low it’s a luxury to protect against it.
Rode my bike to work today, but will be packing the 45-foot diesel motorhome for vacation tomorrow. Hoping to average out my carbon footprint 🙂
Nothing wrong with buying luxuries. However, I agree that means recognizing them for what they are (I think we better relish them that way!) and balancing them out with sacrifice as needed in other areas. That sacrifice should, for sure, include putting in the work/saving in advance to balance the spending later. Otherwise, it will be way more effort later (at a time where you are less able) to pay for money you have already spent (from a time where you were able). Sequence is everything.
-LD
I agree that we enjoy them more when we recognize them for what they are.
I’m a 50 yr old ophthalmologist and have had a Model S for 4.5 years. I love the car but have no idea if it’s good for the environment and that wasn’t a factor when I bought it. I do find the tesla community to have a disproportionate number of self-righteous smug boorish finger-waggers. So much so that I have at times considered selling it just to avoid the association with them. Since buying it I have become much more frugal, and although the cost was not an issue for me I would never spend that much money on a car ever again and if this thing ever starts being unreliable my next car will likely be japanese and cheap. I do read so much about Tesla’s being unreliable and poor quality but that has not been my experience at all, it’s probably been the most reliable car I’ve ever owned and although it certainly doesn’t justify the price I’ve probably saved $15k+ in gas plus the same in tax credits, compared to my previous car.
If you are a strong believer in Tesla as a company, then you should have noticed the company’s potential for disruption. More automated factories leads to lower manufacturing employment (assume that the currently cycle of surging in hiring to meet a quarterly delivery target and then subsequent layoffs to meet positive cash flow targets eventually smooths out); no dealerships leads to fewer sales jobs; and lack of internal combustion engine may lead to less demand for mechanics. If Tesla perfects these unique approaches, the rest of the industry may be forced to follow suit.
Point is technological disruption is a threat to many current jobs , including physicians. Creative destruction likely means that new jobs will be created to replace the jobs eliminated, but may require different skills than the jobs being eliminated.
Examples:
Threats of AI reducing the need for radiologists (1 physician now signs off on 100 AI analyses, rather than 10 physicians reading 10 scans each).
Physician extenders reducing demand (and therefore wages) for fully trained, board certified physicians. 1 or 2 ER docs oversee a group of PAs and NPs instead of a ER fully staffed by ER docs.
The threat of disruption should make the goal of Financial Independence even more pressing.
As a counter point, I know these threats have existed for a long time and lots of predictions end up being wrong. But this is directed to a Tesla fan who really believes the company will result in a major disruption. If Elon can disrupt the auto market and commercial space travel; what will happen if he (or Bezos, Dimon and Buffett) decide to really focus on medicine? Given how long it takes to become certified in a new medical specialty, technology change should be encouraging you to eliminate your own risk exposure (don’t need to practice medicine once you are FI).
I dont hate you at all, in fact I love you WCI. Because of you I can afford a Tesla. I drive the long range AWD model 3. Its awesome, I highly suggest who ever can afford, buy it. If you are going to go buy a 60K car, please buy a Tesla and use my referral code. Infact Tesla is more useful and brings everyday happiness to me than the boat I bought that I use for 1 month in a year.
Please make sure your house is in order. My net worth is 3.3M (Does not include boats and cars), zero debts. My primary house all paid off is only 450K of my net worth.
WCI thank you again for helping me and making me rich enough so I can afford these luxuries for they do bring happiness. Money does bring some happiness.
Ha ha, good point. I’m actually probably helping doctors buy Teslas!
As a tax attorney [and grandson of a surgeon] I very much enjoy your column. I chuckled as I read the Tesla comments because it appears that the EV-environment benefit argument is only supportable with a very truncated analysis. And, as you note, there are more than two choices. The big flaw in the EV analysis is shown in a recent German engineering study that looked at the CO2 impact of a Tesla. However, this study took a more comprehensive view by including the CO2 impact of the mining of the rare earth minerals [cobalt, manganese, and lithium] for the batteries; their very tiny concentrations require extensive [CO2-producing] operations to extract and refine. The Germans concluded that the total CO2 impact of a Tesla from producing the charging electricity and mining for the batteries was greater than that of a Mercedes diesel. Of course, the result would be even worse in e.g. PA, in which EVs are essentially coal-powered.
What makes this analysis very personal is that prior to reading this study, I have been advising a company that has patented the first new engine in the US in 30 years. A major CA university estimates this engine will be 83% more efficient and able to run on a variety of cleaner fuels. So if the German engineering study is confirmed and this new engine yields anything like the university estimate, the entire EV argument will be turned on its head. Perhaps that is why the pro-EV analyses never seem to look at TOTAL CO2/environmental impact.
The study is clearly flawed.
I had a German “clean” diesel sportwagen. Then, sold it back to VW 3 years later for $7K more than I paid. Despite this, my dream vehicle is a Sprinter 4×4 turbodiesel glamper van. I think WCI should do a blog on these. They’re all the rage amongst the wannabe outdoorsy types, doctors included.
I drive a used Nissan Leaf that I adore. It also lets me be self-righteous in multiple ways. 😉
Fabulous writeup on the behavioral aspect of money. It’s a choice, like so many others… I wonder why it so polarizing. I would love a Tesla but with two recently purchased new cars (both paid with cash), it’s not on our buy list right now. As for the TSLA stock, I got it before WCI was a thing and all I knew were individual stocks. It was less expensive back then, so I will have some capital gains if I wanted to get rid of it (or maybe not! Who knows with this wild ride). It’s part of my Bingo money now, so my retirement doesn’t hinge on it.
This post is spot-on. I’ve never bought a Tesla car or stock, but I did buy Tesla solar panels last year. I would add that to your list of ways to help the environment. (Though not much of a status symbol since they’re not visible from the street LOL)
Even in NY, our house now produces as much electricity as it uses, and in 7 years the system will have paid for itself.
I do not think Tesla is a good example. I would say Toyota/Nissan vs Mercedes/BMW is the example of luxury. Is it worth ? Everyone has different opinion. I will not encourage luxury if someone in debts. On other hand, if a doctor 10 years off residency is still in a lot of debts that is something wrong.
Tesla while is quiet expensive is different from other car and fun to drive. Most people who are against Tesla actually never drove it. I compare Tesla to cell phone. Can we still use old type Nokia (simple, cheap, reliable) or to buy smartphones? In most cases smartphones are waste of money : phones are to talk as cars to get you from point A to point B
I tend to blow my money on cocaine and hookers, but you don’t see me complaining to Jim when he uses that as an example of waste of money/can’t afford and should pay down debt example.
That being said, cocaine and hookers are much cheaper than a tesla . . .
Hope my wife isn’t reading this . . .
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