I get into social media discussions all the time about how electric vehicles are the future, and the number one concern used to be how you will charge them. But as charging has gotten faster and available at more locations, the biggest concern has shifted to cost. Since electric vehicles have lower fueling costs, lower maintenance costs, and possibly lower insurance costs, those with good credit can pay $10,000 or more for the vehicle and still have lower monthly costs. That being said, Tesla is having no trouble taking an ever increasing share of the high-end market; the problems are in the lower end of the market. The basic problem is the more affordable electric vehicles don’t have the range or fast charging for trips. A top solution to this problem is to rent a car for trips. Previously, that meant going back to a gas car or paying a premium for a specialty car on Turo. Last year, when Hertz announced it was buying Tesla Model 3 and Model Y vehicles in a big way, this opened up new possibilities! Now you have two good choices.
- You can buy a shorter range electric vehicle like an older Nissan Leaf and rent a Tesla when you take a longer trip.
- You can get a plug-in hybrid like a Chevrolet Volt and use electricity around town and gas on your trips, or rent a Tesla for some trips.
Older Nissan Leaf
I owned a 2012 Nissan Leaf for 6 and half years and I loved it, but it wasn’t the same experience as my Tesla Model 3 or Model Y. Steve Hanley, who also owned a Nissan Leaf before switching to a Tesla Model 3, recently wrote about the Nissan Leaf. My pros are the car is roomier that your would think, has more cargo space than you would think, has great efficiency, good acceleration, instant torque, and low maintenance costs. The cons are the 70 mile or so of range is only enough for local driving, the CHAdeMo charging port it uses for fast charging is going away in the US, and the battery doesn’t have active cooling, so the battery will degrade more quickly in the South where it is hot or warm all the time. It isn’t a great choice in freezing temperatures, since your limited range will be even more limited in very cold weather.
In short, the Leaf is basically a great starter EV if you are willing to put up with its disadvantages. I always had a gas car to use for longer trips, but today you could either have a longer-range EV for longer trips or rent one from Hertz or Turo, as long as you don’t take too many trips a year.
Chevrolet Volt (Now Discontinued)
I helped my sister buy a Volt a few years ago to replace an aging minivan, and it has worked out well. I also considered getting a 2012 Volt when I got my Leaf, but I didn’t like that the original Volt only seated 4 people since I had a family of 5 all living at home at the time. I also didn’t need the longer range, since I had 3 other larger cars to use for long trips. But it works perfectly for my sister. She gets the low costs and great driving characteristics of an EV around town, and when she needs or wants to take a longer trip, it gets great fuel economy. Although Chevy has discontinued the car, it is still well supported by Chevrolet’s nationwide dealerships. Here is an older article that goes over the long-term costs of the Volt.
Older Honda Civic
My son-in-law owned an older Civic for many years and it’s a good, reliable car by historical standards. I list it here to compare and contrast with the two plug-in options.
As you can see from the Edmunds and EPA comparisons, with gas at over $4.00 a gallon, you can really save thousands of dollars almost everywhere over the 5 years of owning an electric car over a gas car. The more miles you drive every year, the more savings you will get. These older EVs that I mention here don’t have that much range, so just keep in mind that if you go more than their daily electric range, you will have to spend a bit of time charging them during your day.
Hertz Rental Prices For Tesla
After spending some time on Hertz’s website, I noticed a few things.
- Tesla Model 3 and Model Y vehicles were available at most major locations.
- Tesla vehicles were frequently sold out, so if you want one, reserve well in advance.
- The prices did vary from city to city, but I was surprised the price was usually either the same or a little more than a mid-sized SUV and usually less than a luxury mid-sized SUV.
If you drive a lot over your rental period (let’s say 3000 miles), you could spend about $510 (3000 miles/25 mpg*$4.25 a gallon) in gas if you got a regular gas SUV, but your Supercharger bill for a Tesla should be less than $187.50 (3000/4 miles per kWh*25 cents per kWh). If you drive less, your savings will be lower.
What Happened To The Affordable Used Tesla?
When Tesla announced the $35,000 Tesla Model 3 three years ago, I expected that over 5 years, it would depreciate to about $15,000. Now, after 3 years, instead of dropping to about $20,000 (which was my expectation after 3 years), the cheapest Model 3s you can find are over $40,000 (even Standard Range models with 100,000 miles are about $38,000). In contrast, had you purchased a 2019 BMW 330i for about $40,000, those have depreciated to about $30,000. If you would have purchased the 2019 Camry or Accord for $25,000, it has depreciated to about $20,000. What happened? It is a combination of the general supply chain shortages caused by disruptions due to Covid-19 and the public starting to realize how good electric cars really are! Tesla’s recent price hikes and long wait times are also certainly a factor. As Tesla makes more cars as Austin ramps up, and other carmakers also sell more affordable electric cars over the next couple years, I do expect the price of used Teslas and other electric vehicles to come back down to lower levels.
Although used car prices are still much higher than before the pandemic, it appears they are starting to normalize toward lower levels again.
Finding an affordable electric car these days is challenging — certainly more challenging than I thought when I started this article. What ideas do you have to make the purchase more affordable? I hope the information and data I provided helps you to make a more informed decision.
Disclosure: I am a shareholder in Tesla [TSLA]BYD [BYDDY], [NIO]XPeng [XPEV] and Hertz [HTZ]. But I offer no investment advice of any sort here.
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