The $100,000 Economy Car

The $100,000 Economy Car

The Tesla Motors sports car costs about $100,000--so why would anyone buy it? Because it's so cheap to own.

Okay, let me explain. The correct comparison isn't to a family sedan. The correct comparison is to a high performance two seat sports car--like a Corvette. You could buy a new Corvette for about $50,000 (maybe less, if you hit up the Chevy dealer in Boise in the depths of winter).

Tesla claims that the electricity for their little whizbang costs about two cents a mile. The gasoline for a Corvette is going to cost you about nineteen cents per mile right now--and the way things are going, I wouldn't be surprised to see it at forty cents per mile by the time you either wear out the car, or wrap it around a tree.

I don't know what the long-term maintenance costs of the Tesla are going to be, but I would be very surprised to see them comparable to a gasoline engine. Think of the number of electric motors that you use on a daily basis--and that never, ever wear out. EVER. I've never had a kitchen appliance electric motor fail. I think that I have had one electric drill motor fail. Electric motors are remarkably durable and maintenance free. Have you ever had a tune-up on an electric motor? Ever changed the oil? Ever replaced an air filter?

Other parts of the Tesla are going to be similar--like brakes, wheels, tires, steering gear, etc. I would not be at all surprised to see a Tesla end costing at least $0.25 per mile less to operate. In 200,000 miles, the Tesla's lower operating cost might well enable you to break even.

I really look forward to seeing Tesla's family sedan--and the Chevy Volt.

UPDATE: A reader tells me that the Tesla uses a different battery technology from the Prius--and one that is more likely to wear out. The batteries won't be cheap.