Personal Consumer Issues • Is Tesla really low maintenance?

For sure the operating cost differences is a primary motivator for considering EVs. The baseline differences are so great that its hard to believe the (recent) change in the price of gas materially drive specifically the change in car depreciation.

What you are saying is true, but tends to almost exclusively apply to the upper end of the market. When we are talking about basic transportation, it is all almost exclusively about the total cost of ownership. I do hear you and agree that BH is in no way representative of the way that the overall auto market operates and thinks about these issues, but will point out that the EV threads on BH uniformly focus quite heavily on the TCO. There is still a focus on the driving experience, charging infrastructure, convenience and time savings, but TCO is a major focus.

That is, there is not enough price-sensitivity to the relative changes in price of both sources for it to change the demand for the new car to in turn change demand for used cars.

Except that's not how the US auto buying market operates. As you correctly mention below, it tends to be more about impressions, and suddenly high gasoline prices terrify people, make them think that the price will keep going up and up and up and eat into their already very tight cashflow. This is the reason that during times of gasoline supply disruptions, when gasoline prices suddenly jump up, even BH, which does tend to be more analytical, gets threads with people seriously talking about selling their otherwise perfectly reliable, low maintenance vehicles with lots of life left and buying something brand new, just so they can save on gas. Then, gasoline prices plummet, and the overall demand for large SUV's goes way up.

One factor might be that crude oil price changes don't feed through to gasoline prices in Europe in the way they do in the US?

Let's assume VAT taxes (c 20% in the EU countries) don't fluctuate with final gasoline price (they do).

Then if say $6/gal in the EU, half of that is various forms of tax, half is the price of the gasoline. Crude oil goes up 50%, price of gasoline only goes to $7.50. (I get confused in my head between Imperial gallons and US gallons, so I am guesstimating what the average European fuel price would be in $ per US gallon).

(European electricity rates are also high on average compared to USA, but there are places in the USA which have Europe-level electricity prices (California and parts of New England, it seems, chiefly; also Hawaii of course).

Whereas say $3.50/gal in USA including 50 cents of tax, price goes to $5.00. Pretty close to 1 for 1.

Hence the greater sensitivity of US drivers. Also:

- US cars are generally less fuel efficient (bigger, more SUVs & pickups)
- US drivers generally drive longer distances

Both of which would make for a greater sensitivity to gas prices.

I agree that car buyers are short termist re gas prices. And also these days, in the UK, the biggest sensitivity is to car loan rates - because most new cars are bought on some form of credit arrangement "usership not ownership" as a BMW guy put it to me.

The thing with EVs in the USA is that most households are probably 2 cars (at least). So having a "cheap commute" vehicle can make sense alongside a "long distance" car. In Europe that second car is more likely to be public transport.

What I have noted in the last couple of years ago in London and in a big North American city, is just how many Teslas one sees. It used to be I would see one maybe once a week, and now I see several in a day. Maybe that's just distinctive styling (some other vehicles like VW ID4/ID3 are also distinctive) but, still.

Statistics: Posted by Valuethinker — Thu Apr 25, 2024 3:33 am — Replies 185 — Views 14335

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