Published on April 29th, 2018 | by Zachary Shahan
April 29th, 2018 by Zachary Shahan
A new fully loaded Tesla Model 3, a new base Model 3, a used BMW i3, or a used Nissan LEAF — considering the possibilities and doing the calculations, things actually get more complicated than I expected. Read on and please do help me to speculate.
I love the BMW i3 and have probably dreamt of getting an i3 since I first test drove the car in 2013. I love the Model S parked in my parking space here in Poland, but I do often feel like the i3 is the best city car out there. The Model S is just too big.
Florida, though, is made of highways and parking lots — not real cities. And the Model 3 is a step down in size from the Model S. It’s also cool as heck, has much better range than the i3, has Supercharging, has Autopilot (if you pay for it), and comes from a company that’s trying to change the world for the better (i.e., help save humanity from itself).
Then there’s the Nissan LEAF — a great electric car that I still think is super cool and just about everything you need 95% of the time. It’s genuinely the “smart money” except in odd cases, imho.
This has been the dilemma I’ve been facing for approximately 2½ years — from the time I first thought my family and I were about to move to Florida, to today, approximately a month and a half from the actual flights. (Long story.) But as we really, really got closer — and after getting my invite to order a Model 3 — more numbers started rolling around in my head.
A used LEAF in the region could be had for $7,000–10,000 depending on how far back you go in model year. A used BMW i3 could be had for $15,000–16,000. A new Tesla Model 3 costs $49,000 if I want to get one when arriving, or potentially as low as $36,000 if I somehow delayed my purchase until “Late 2018.” But there are some huge matters not accounted for in these simple numbers.
One of them is the US federal tax credit for EVs. That’s not on the table for a used EV, while it could bring down the price of a Model 3 by as much as $7,500 … if I got the car quickly enough. Tesla is set to hit the 200,000 car crossover point soon, which will trigger the phaseout of the tax credit for the California company. If the timing sucks, that could mean not getting the full $7,500 credit on a $36,000 Model 3. So, we now have:
• used LEAF — $9,000
• used i3 — $16,000
• new fully loaded Model 3 — $41,500
• new base Model 3 — ???
Another thing to take into account is that I could use a Model 3 in our Tesla Shuttle service. We haven’t had much time to explore the potential in the region where I’ll live, but I could see it being significant and am definitely eager to test the waters. That would mean income on the Model 3 that I couldn’t get with the LEAF or i3, and it also means the longer range and premium features of a $49,000 Model 3 could pay off to some degree or another via easier, quicker, and higher revenue service.
And then we get to a biggie that is perhaps the most difficult question of all: depreciation. If we decided to sell our EV in a year or two, what would we get for that used LEAF, used i3, used fully loaded Model 3, or used base Model 3? In the case of the Model 3, could we actually make money on the car?
Perhaps I’m being idiotic, but these factors come to mind with the Model 3: If the tax credit is gone, a potential buyer can no longer think, “Well, I could automatically get a $7500 credit on a new Model 3, so the price of a used one should be reduced by that much.” If Tesla is producing 40,000 Model 3s a month, there may not be a super long wait if you all of a sudden find out about the car and decide you want one. However, if production is still ramping up and the waitlist is forever long, that could push people to the used car market and keep those prices higher than is “logical” or “natural.”
On the other hand, Tesla will probably still prioritize fully loaded cars for simple business reasons, so there’s a decent chance the wait for a fully loaded 3 won’t be that bad.
Here’s one more way to look at it:
$14,000 spent on a fully loaded Model 3 in one year, minus Tesla Shuttle revenue, minus a $7500 or so tax credit, and minus (if it is a minus) whatever the depreciation is. What is the depreciation? What is that final number?
$9,000 spent on a used Nissan LEAF, minus whatever the remaining value is after one year. What is the depreciation? What is that final number?
$16,000 spent on a used BMW i3, minus whatever the remaining value is after one year. What is the depreciation? What is that final number?
Can you help me consider these matters? What’s your guess on depreciation for these models? Am I missing something obvious?
Also, what color?…
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