Tesla's Problem

A while back, I did a quick, back of the envelope calculation comparing a Tesla Model S to a Toyota Corolla, and figured that the Model S would have to come down in price - a lot - in order to compete purely on cost over a five year period. [1]  The price of a Tesla really only makes sense if it costs about $12,000 more than a Corolla.  (Interestingly enough, that is the reported cost of a Model S battery pack.)  That works out to about $30,000.

In other words, once I can buy a Tesla for 30 grand, it will become a worth looking at as a possible worthwhile investment for me.  Depending on the expected life of the car, and the price of gasoline, it might even be worth it at a higher price point.

So I've been keeping an eye on the Tesla Model 3, which was supposed to approach this price range.  Current opinion, however, seem to be that the price will end up in the $50,000 range.

I am sure you can see the problem.  I might, someday, be interested in buying an electric car.  I doubt that there will ever be a day when I would be particularly interested in buying a luxury car that happens to be electric.

A shame, really, since they seem like such interesting cars.  Unless something changes, though, it looks like there is no Tesla in the near future for me.  Well... no new Tesla.  I will have to wait and see how well they hold their value.  It may be that a used Model 3 with a good usable lifespan might fall into the "worth considering" range.

[1] Rough figures: $62k for a Tesla Model S, $18k for a Toyota Corolla that gets 27 MPG.  If you take the difference in price ($44k) and put gasoline at $4/gallon, the Corolla can go 297k miles on $44k worth of gas.  At 15k miles/year, that is almost 20 years worth of gasoline for your Corolla.  With that price differential, you can by a new Corolla, drive it for five years, then buy another Corolla, drive it for another five years, and still spend less than you would on the Model S.  Keep in mind that is without considering the charging costs for the Model S at all.

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