Battery Electric Vehicle News / Enjoying the Transportation Revolution

Grumpy_chap

Martyn1981 said:

You seem to be obsessed with an initial price differential (the con's), whilst completely ignoring running costs (the pro's) every single time. But we need to consider all costs, and time, for the TCO.

That is absolutely not the case, and I've said so:

Grumpy_chap said:

Either way, for what are broadly "comparable" types of car, it is still a variance of £8k or more.  On that variance in capital, the Tesla may well achieve lower total cost of ownership but, for many, the extra cost-to-entry is the precluding factor.

Every time, my comment has been in the context of the additional capital cost being a barrier to entry.  Most car buyers are not sitting there doing a full life-cycle-cost-analysis and, even if they did, if they don't have the extra £000s, then they can't chose the lower outturn cost solution.

If a few extra £000s was not an issue (for most it is a lot of money), no-one would ever buy a 2 yo car because they could just dip in for the extra few £000s and have brand new.

I am converted - at the beginning of last year (2020) I was seriously looking at suitable EV's to replace my ageing Focus.  Supply-chain problems (then) followed by COVID mean that I now have the car laid up and just walk so, no point in buying anything for the time being.  It may well have worked to my advantage as the price and range of EVs is only going in may favour.  My preferred next car remains the TM3LR, but the MG5 could be a serious contender also.  Ultimately, it has to be an out-turn that is "better" than a Mondeo.

Regarding the IONIQ, I didn't look to see the change of battery spec., and simply pulled latest new prices from the Hyundai website for comparison of cost-to-entry challenge.

Ultimately, someone has to bear the cost of that higher depreciation over the life of the car.  The lower running cost can only be secured if that increased capital outlay is met somehow.

Martyn1981

Hiya, yes, every time you comment in the context of the price differential being a barrier to entry, I completely agree that that's what you do. But most people don't pay outright for the cars. You'll know this as you give an absolute tonne of excellent advice to folk every day on the Motoring forum, and because it's been mentioned so many times to you on here.

So again you have obsessed over the initial cost of the car, not the monthly cost, which for many will be similar, and not the enormous barrier to entry that you make it out to be. I simply can't understand why you seem to be deliberately ignoring this element every time, no matter how many times it is mentioned.

Edit - Ok try this example, which option costs more over a one year period?:

1. Initial cost £100, running costs £1pm.
2. Initial cost £10, running costs £10pm.

ABrass

Almost no one buys new cars for cash.

91% bought on finance in 2019.

https://uk.motor1.com/news/353737/91-percent-cars-financed-year/amp/

Of that I believe most of it is leasing rather than hire-purchase but I don't have a link.

But who cares, the sticker price will be the same in four or five years and the usual suspects will just find something else to complain about.

shinytop

Martyn1981 said:

Hiya, yes, every time you comment in the context of the price differential being a barrier to entry, I completely agree that that's what you do. But most people don't pay outright for the cars. You'll know this as you give an absolute tonne of excellent advice to folk every day on the Motoring forum, and because it's been mentioned so many times to you on here.

So again you have obsessed over the initial cost of the car, not the monthly cost, which for many will be similar, and not the enormous barrier to entry that you make it out to be. I simply can't understand why you seem to be deliberately ignoring this element every time, no matter how many times it is mentioned.

Edit - Ok try this example, which option costs more over a one year period?:

1. Initial cost £100, running costs £1pm.
2. Initial cost £10, running costs £10pm.

Doesn't matter, lots of people would choose 2 even if they worked it out. 

I normally buy 3 year old cars for about 50% of new (maybe £12k) and keep for 3 years.  To buy an EV that has enough range for me (250 miles) I'd have to spend £40k.  It's a huge leap of faith to spend £40k of my own money and hope it's worth something in 4 years or commit to a 48 month PCP deal.  I could afford it and I can do the man-maths as convincingly as anyone else but to me that commitment is a big barrier to EV ownership. I don't think I'm alone; there are a lot of non-PCP folks who need to be converted. 

BTW I consider my recent decision to get an ASHP rather than oil central heating an easier one than replacing my ICE car with an EV. 

  

JKenH

Martyn1981 said:

Hiya, yes, every time you comment in the context of the price differential being a barrier to entry, I completely agree that that's what you do. But most people don't pay outright for the cars. You'll know this as you give an absolute tonne of excellent advice to folk every day on the Motoring forum, and because it's been mentioned so many times to you on here.

So again you have obsessed over the initial cost of the car, not the monthly cost, which for many will be similar, and not the enormous barrier to entry that you make it out to be. I simply can't understand why you seem to be deliberately ignoring this element every time, no matter how many times it is mentioned.

Edit - Ok try this example, which option costs more over a one year period?:

1. Initial cost £100, running costs £1pm.
2. Initial cost £10, running costs £10pm.

Or more realistically 

1. Initial cost £30,000, running costs £10pm
2. Initial cost £20,000 running costs £100pm

JKenH

ABrass said:

Almost no one buys new cars for cash.

91% bought on finance in 2019.

https://uk.motor1.com/news/353737/91-percent-cars-financed-year/amp/

Of that I believe most of it is leasing rather than hire-purchase but I don't have a link.

But who cares, the sticker price will be the same in four or five years and the usual suspects will just find something else to complain about.

There is no doubt in my mind buying a new EV on finance makes a lot of sense (especially if you can use salary sacrifice). Sometimes with PCP deals you get  free servicing thrown in as well. Buying a used car on finance less so. As this article explains, the interest rates charged on used car finance can be 14% compared to 0% on a lot of new cars. 

https://www.parkers.co.uk/car-finance/advice/used-car-finance/

If the price differential between a used ICEV and used EV is £10k then that could be an extra £1400pa in finance costs. Depending on mileage you might (or might not) make that back in running costs but it is quite a big commitment to make. That is one reason I am concerned that the used EV market might be more sensitive to the price differential between ICEV and EVs. 

Different choices work for different people so one can’t be dogmatic that EVs are best for everyone. They are for some but not all. 

In relation to an earlier post about waiting lists, it’s not just EVs, a lot of ICEs also have quite long waiting lists due to chip shortages. That’s why new car sales dropped so much this summer. 

silverwhistle

shinytop said:

.. that commitment is a big barrier to EV ownership. I don't think I'm alone; there are a lot of non-PCP folks who need to be converted. 
 

True. I had never paid more than 4K for a car before buying my new MG last year! I'm retired so it's been entirely self-financed with cash (not unconnected with always previously having cheap cars..) and no commute to save money on. But I thought it time to move to electric and indulge myself and I intend to keep the car some time, as I usually do. It's certainly been cheap to run and although the range is not up there with some of the recent models it does all my regular runs with no problem. This last sunny week I've even benefited from some free solar via the granny charger, and the current news highlights the benefits of not having to join the petrol station queues..  I often cycle the short local trips but it's good to know that I'm not causing much in the way of local pollution if I do use it around town.

Grumpy_chap

Martyn1981 said:

Hiya, yes, every time you comment in the context of the price differential being a barrier to entry, I completely agree that that's what you do. But most people don't pay outright for the cars. You'll know this as you give an absolute tonne of excellent advice to folk every day on the Motoring forum, and because it's been mentioned so many times to you on here.

So again you have obsessed over the initial cost of the car, not the monthly cost, which for many will be similar, and not the enormous barrier to entry that you make it out to be. I simply can't understand why you seem to be deliberately ignoring this element every time, no matter how many times it is mentioned.

Edit - Ok try this example, which option costs more over a one year period?:

1. Initial cost £100, running costs £1pm.
2. Initial cost £10, running costs £10pm.

Yes, that is absolutely what I say and I also alert the danger of just the monthly cost being considered when I comment in the motoring forum.  Sadly, the marketing people in the motoring world use this focus on monthlies to sell cars that are not affordable. 

The example I cited earlier today shows this in quite an extreme form:

Grumpy_chap said:

There is a real danger in PCP pricing that it makes very vastly different cars the same price.  My local Jaguar dealer landing page today has a brand new I-Pace for £579 per month.  Also a 2012 Jaguar XF, 51k miles, £704 per month.  Clearly, not everyone interested in the £11.5k used car can afford the brand new EV just because they played clever with the monthly payments.

Anyway, moving away from extremes and keeping the Lexus ES vs TM3 as the comparator vehicles, and using the manufacturer's website figures (which may be possible to improve upon but we need something quick and simple for comparison):

Lexus ES Premium Edition:

• Deposit £6k
• Monthly £372
• 48 months 10k miles / year
• 47 x £372 = £17.5k
• Balloon £14k

Ignore the balloon, as in the "monthly is all that matters world" this never gets paid. 
The customer pays £17.5k + £6k = £24 k over four years = £6k / year.

TESLA Model 3 SR:

• Deposit £6k
• Monthly £515
• 48 months 10k miles / year
• 47 x £515 = £24k
• Balloon £15k

The customer pays £24k + £6k = £30 k over four years = £7.5k / year.

I think, for many, <£400 monthly versus >£500 monthly will be the same psychological barrier to entry as the £41k vs £32k cash price.  You may disagree, which is fine.

Now, we move to the life-cycle cost analysis which, frankly, the vast majority of people really do not do when buying a car.  Those that do probably do so only to justify the decision their heart already made.

Lexus 50 mpg combined.
10 k miles = 200 gallons unleaded = 910 litres
£1.35 per litre = £1,230 per year
Plus the cost to PCP (£6k) = £7,230

TESLA
I can't easily find an energy figure on the website, but posters on this forum seem to suggest 4 miles / kWh.  I am sure someone will confirm this number.
10 k miles = 2,500 kWh
20 pence per kWh = £500 per year
(Some may better this with solar, some may be using public charging at more expensive rates, so standard domestic rates seems fair basis to use.)
Plus the cost to PCP (7.5k) = £8k

I have tried to do this with an open mind and reasonable numbers.  I don't stand to gain by erroneous numbers as it is actually the type of internal debate I am having right now.  Whenever I return to the office and need a car again, then I'll be looking for a new model and this is genuinely the type of assessment I am doing.  The "low running cost beats everything" brigade are not clearly winning.

I will be happy for errors in the calculation or assumptions to be set out for me as we all benefit from accuracy.

In the mean-time, I'm sticking with lock-down shanks's pony (greener, more MSE and keeps me fitter than either the Lexus or the TESLA).

silverwhistle

Grumpy_chap said:

20 pence per kWh = £500 per year
(Some may better this with solar, some may be using public charging at more expensive rates, so standard domestic rates seems fair basis to use.)

No, that assumption at least is completely unrealistic. I mentioned I used some solar, but the alternative for most people for 95%+ of their regular driving is overnight cheap rate, in my case 5p a unit. Before Agile became uneconomic I even got paid to take power on occasion, and being selective meant my average was less than 5p a unit. 

Grumpy_chap

silverwhistle said:

No, that assumption at least is completely unrealistic. I mentioned I used some solar, but the alternative for most people for 95%+ of their regular driving is overnight cheap rate, in my case 5p a unit. Before Agile became uneconomic I even got paid to take power on occasion, and being selective meant my average was less than 5p a unit. 

OK, I don't agree with your assumption as I can't get electricity anywhere near that rate but I'll plug it in for the sake of co-operation:

Lexus 50 mpg combined.
10 k miles = 200 gallons unleaded = 910 litres
£1.35 per litre = £1,230 per year
Plus the cost to PCP (£6k) = £7,230

TESLA
I can't easily find an energy figure on the website, but posters on this forum seem to suggest 4 miles / kWh.  I am sure someone will confirm this number.
10 k miles = 2,500 kWh
5 pence per kWh = £125 per year
(Some may better this with solar, some may be using public charging at more expensive rates, so standard domestic rates seems fair basis to use.)
Plus the cost to PCP (7.5k) = £7,625