Also in the 10-year crowd with a Tesla Model X at 8+ years already and with too low a resale value to sell, which I'd like to do because of he-who-shall-not-be-named. The X was my wife's daily driver for years, but after sitting (not even test-driving) in the Galaxy the other day, she complains about how bad it is. We did trade-in a Nissan Leaf after 6 years, but that was to buy the Lucid AT.
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How long to keep an EV?
- Thread starter HaltheAerialist
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My resale value was dropping by about $1000/month when I traded my '17 X P100D for a Polestar 3 a little over a month ago. Even Tesla wouldn't take it except to trade in on a new model. Polestar gave me a big discount on a lease for it, though.
Interesting question, and this caused me to go back and analyze my own ownership history. While I've only even owned my gas cars I've both leased and owned my EVs, which begs the question: which was better?
The EV I owned was a Tesla Model 3 Dual motor, purchased new shortly after they started rolling off the line. It needed very little maintenance over the years, though I did go through rubber every 20k miles like clockwork. I sold it at a little over 5 years old with 84k miles on it- the control arms were starting to make noise and the battery had degraded significantly, so I punted it rather than invest. The car had a 57,180k sales price (including all taxes, fees, California CVRP) minus incentives (7.5k back on the early federal EV rebate program). I spent money maintaining it, registering it, etc, and I finally sold it 62 months later for just over 20k. Total cost to own 43k including financing but excluding "fuel" and insurance. If I spread that cost out over my ownership the car was effectively depreciating at 26% per year: MSRP (54,000) x (0.74 (retained value per year) ^ 5.17 (years)) = 11k. Minus the 54k msrp = the 43k I spent owning the car.
I'm not sure what to call that number, but I spent 26.4% of the car's value per year owing it.
The reason for all that math is because I can easily compare with the cars our household has leased. For example my first EV was a 2014 Fiat 500e, $87 per month. Add registration, tires (none), return fee, down payment, etc and I spent $4k over 3 years owning that car. MSRP 32k, effective cost per year just 4.4% of MSRP. Analyzed this way, in order of date acquired, I get:
Fiat 500e: 4.4%
Tesla Model 3 Dual Motor: 26.4%
Ioniq 5 Dual Motor: 14.7%
Audi E-tron GT: 9.6.%
Tesla Model Y: 14.4%
Audi SQ8 E-tron: 8.9%
Now there are lots of variables here. There's no correction for miles (the Model 3 had the most), interest rate variability with time, etc. Cars that are poor value new (like the 500e or E-tron GT with high MSRPs) get an artificial boost. And all of these deals change- you can lease an Ioniq 5 now for much less than I did a few years ago. But in my case leasing has beat buying handily. Owning the Tesla longer would probably have improved the score, but then again maintenance was kicking up and it had a long way to go to catch any of the other cars, let alone the best ones. And I'd have been dealing with ever decreasing range best case...
I actually think buying and holding the Tesla Model 3 when I did worked out well- like the gravity it was at the cutting edge, so unlike say the 500e it was valuable and relevant (to me) five years after new. Assuming the worst doesn't happen to Lucid I expect the Gravity can be similarly valuable and relevant to owners half a decade or a decade from now. I'm still not sure that option will beat competitive leases that are currently available (for how long?) on a cost basis, however.
Thank you for the detailed analysis! I would not have expected the leases to cost so much less than the car that you purchased. As you say, there are many variables, including the value of each car (new and used). Another variable is the very high lease interest rates currently being offered on Gravity. If the Gravity leases were more in line with other vehicles, then I could easily believe that leasing would be the most cost-effective option. But the high interest rate makes leasing a much more questionable value.
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The first variable that stands out like a sore thumb to me is your annual mileage on the purchased Tesla versus the leased EVs.
You average almost 17k miles with the Tesla; no mileage limit due to ownership.
Mileage impacts lease payments. so the lease payment of $84 is possibly with a very low annual mileage limit that makes the 17k miles look like trips around the world in a year.
Tires and other wear & tear parts were also impacted by 17k miles.
LIke you said, several variables that possibly give the lease EVs an artificial boost.
The lease on that SQ8 E-tron has got to be really low considering Audi ended production of that model earlier this year.
Good close out deal I would think.
Good band-aid while you wait to see what happens with Gravity lease terms.
Bottom line: you've done an analysis that helps inform your decision; you know all the variables and are able to factor them into your analysis.
Completely agree. Currently the leases on the Gravity can't touch the other deals I've gotten, though I expect that to correct somewhat in time due to market forces.
Very true, thought the Tesla and Ioniq 5 lease deals were 15k miles/ year so not that much different. The Fiat was so short range I probably couldn't have done 17k miles a year. The Audi E-tron was 7.5k miles per year but I paid to go over (cheaper than buying miles up front) and included that in the equation. Either way I'm comfortable that even controlling for miles current lease deals are far lower cost than owning, and an easy way to stay relatively current as tech matures. I do, however, expect that's probably going to flip here in the next year or so, and buying might well look more attractive again.
Yea exactly. It's got a bunch of the typical Audi frustrations, inefficient, a little buggy and terrible packaging (little on the inside, big on the outside). But dynamically I'm actually very impressed. Similar ride quality to the E-tron GT- very good, but with more suspension travel. It also has really nicely judged balance, three motor torque vectoring works really well. It's not a keeper by any means, but there are far worse ways to bide time.
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Not to get off topic onto Audi, but funny you should mention the "little on the inside, big on the outside".
First time I saw a Q8 ICE model, I thought "that's a nice size suv". Loved the way the rear flared out.
Then I looked inside and was like "Wow, how can that be?".
Q8 etron looks smaller on outside, but still just as small inside.
Enjoy until Gravity meets your needs.
Another way to look at the data, dollars per month instead of a percentage loss per year. I've added the Gravity in my area (taxes, fees) for comparison- base model, Lucid lease or financing.
My credit union gives car loans below 5%, while the above was calculated with Lucid's ~6.5% 60 month terms. That'd make ownership more attractive. I've used the same depreciation and tire change interval as my Tesla and guessed at some additional maintenance costs in the 10 year case. Based on this right now I'd probably buy a Gravity, not lease, but as I'm pretty stuck on leasing for hedging it makes sense to wait it out a bit.
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Thoughts on Personal Property Taxes (PPT) and Insurance Rate.
I've read where some members interested in leasing have also commented about the high insurance rate for the Gravity.
I would think PPT is another consideration.
With the new car MSRP on leased car, PPT and insurance rate will always be high versus decreasing over time with ownership.
Depreciation has its benefits.
Gravity ownership will continue to decrease; barring battery replacement.
