Self-Driving Electric Cars will Soon Be Free, If You Can Afford One

When I add “self-driving” to “electric car”, you may envision a double-unicorn, but these beasts of legend are right around the corner, and they will be damn near free, assuming you can afford one.

Elon Musk has announced that “The Tesla car next year will probably be 90 percent capable of autopilot.” Cadillac will have their “hands & feet free” cruise control shortly thereafter. Nissan has repeated stated that they will have 100% autonomous vehicles by 2020. Remember, that’s only five years away.

An autonomous electric car would save you so much money it could easily pay for itself.

Let’s look at the 10-year cost of owning a new car

Fuel Cost:

According to PlugInAmerica, the average cost for a gallon of regular gasoline in the US over the past three years was $3.53/gallon. By using 15,000 miles as the average amount of miles a person will drive in a year, the annual cost of gasoline for the average car will be $2,135 per year.

Conversely, the average cost of electricity in the US is 12 cents per kWh. Therefore the average person driving an average EV 15,000 miles per year pay about $540 per year to charge it.

SAVINGS: $1,595 per year. $15,950 over ten years.

Insurance Cost:

Assuming you have a clean driving record, you can insure most vehicles with liability-only for about $750/year, with collision adding another $500. Comprehensive, the insurance that covers your damages if someone else hits you, is only a couple hundred.

Self-Driving cars have thus far proved to be extremely safe and highly unlikely to cause an accident. Google has already logged over 700,000 autonomous miles without causing an accident. This means that liability and collision insurance for self-driving cars will have substantially lower insurance premiums. Perhaps only 20% of the current rates.

SAVINGS: $1,000 per year. $12,000 over ten years.

Maintenance Cost:

Electric cars have fewer moving parts than an internal combustion vehicle. Think of the items that most commonly fail on cars, and you’ll find almost none of them on an electric car. In my 24-years of driving I’ve had maintenance and repairs like:

  • Replace fuel pumps
  • Replace a bad transmissions
  • Replace a clutch
  • Repair leaky, failing exhaust
  • Oil changes
  • Blown radiator
  • Replace water pump (three different vehicles!)
  • Blown head gasket
  • Lost belts
  • Replace timing chain
  • Full system fluid flush
  • None of these things are required to repair or maintenance because these systems don’t even exist in an electric car. The cost of maintaining an electric car is estimated to be 1/3rd less than that of an internal combustion vehicle. So instead of $14,310 over the first eight years, it’s more like $9,444.

    SAVINGS: $487 per year. $4,866 over ten years.

    Purchase Cost:

    At this point, the question isn’t “how much does it cost” but rather, “how much is it worth?”

    If you could get a self-driving, electric car that lasts 10-years for $15,950 (or $19,885, since many states exempt sales tax on electric vehicles and there is a federal tax credit of $2,500 toward the purchase of one,) it would literally become a zero cost car just from the savings in fuel prices.

    If you could whack another $12,000 off on insurance premiums, that means you’d get a free ten-year car even if it cost $33,014.

    And with the maintenance cost savings factored in, it would get you up to a retail purchase price of $38,269.

    The Choice

    If I offered you a brand new gasoline powered car for FREE, or a brand new electic car or equal quality for $38,269, your ten year cost of ownership would be identical. They would both cost you the same. But gasoline cars are not free. They still cost serious money.

    The cheapest cars on the market are around $15,000. A $15k gasoline car would cost the same over a ten year period as a $52,269 electric vehicle.

    Batteries are expensive, there’s no getting around that. They are steadily coming down in price, and may see a huge dip once Tesla’s GigaFactory is running, but for now, let’s forget that. If a manufacturer could offer you a 100% electric, self-driving vehicle for less than $53,000, and you can afford it, you would be pennywise and a pound of dumbass if you didn’t take it.

    The rich can afford to get richer

    It still doesn’t pay to be broke. The rich get 0% financing, instead of the 582% charged by payday lenders in Idaho. Having money to keep in your bank account makes it a free service, as opposed to those who dip below zero and incur fees of $35 per transaction. The house I’ve purchased for $1,228/month couldn’t be rented for less than $1,550, and the luxury furniture I bought cash cost a fraction what a rent-to-own contract would give me for inferior furnishings at a place like Aarons.

    This is, unfortunately, more of the same. If you can buy such a vehicle outright, or finance it on A+ terms, you’ll know upfront how much money you’re saving, or actually making on the deal. If you don’t qualify for the payments, even considering you’ll save easily half of your payment in gas, maintenance and insurance costs, you’re still going to be left out in the cold.

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    9 Responses to “Self-Driving Electric Cars will Soon Be Free, If You Can Afford One”

    1. New cars come with warranties, which essentially eliminate the entire “maintenance cost” section. A ten year warranty is quite common on modern Japanese and Korean cars.

      While maintenance costs have been estimated to be 1/3 lower on an electric vehicle, these cars simply haven’t been around long enough (on a mass scale) to prove that. Long-term maintenance costs on these cars is a risk. Tesla is a new manufacturer with no proven history. While their products are/seem to be great right now, there’s no telling how they’ll continue to perform in 10-15 years.

      Another risk is resale value in those ten years. There are other technologies & other fuel sources being developed that have very serious potential to completely replace the electric car market. In ten years, the electric car may be completely worthless.

      Then we need to consider the scenario of buying a two year old car (for likely ~60-70% of the original cost) instead of a brand new one; this will seriously affect the total ten-year costs.

      And let’s consider things like the ability to charge your vehicle. Does your garage have the necessary power outlets or does it require something to be installed? ($$$) How about your work, or your relatives in your next town? Charging stations are still not common enough to be convenient. How much is your time worth?

      As for promises of completely autonomous vehicles… that’s great to hear, but will those vehicles be legal world-wide in the same timeframe? How will they perform in adverse conditions, such as on a snow-covered road, or a dry road with a sudden oil spill? Lots of factors to consider, to develop, to test, to pass through legal barriers.

      Electric cars have a ways to go, and I really doubt the general public will be able to purchase completely autonomous vehicles and put them on North American roads in five years.

    2. You seem unusually pessimistic. Many states have already made these vehicles explicitly legal. I’m not sure exactly what sort of inclement weather is assumed in a state like Nevada or California. The hours of dust and rain storms sufficient to shut down these vehicles can likely be counted on two hands in a single year.

      The fact that technology will continue advancing is not a reason to forsake these technologies. Gas engines will be around for a very long time. If you don’t want a guaranteed money-saver because one that might save you slightly more money in the future might come along, that’s your call.

      The bulk of the cost is fuel, and electricity promises to deliver that at a rate equivalent to 100mpg or $1/gallon (depending how you count it.) You’re right that the future isn’t here, but it’s right around the corner. No one is demanding that you get on board, but we’re quickly approaching the price point where it will no longer make sense to cling to these old, fossil-fired notions.

    3. Wait, I just noticed that your concern was how an autonomous vehicle would behave on an oil covered road. Seriously, this can’t be a sincere contention. I’ve been driving for over 24-years. 30k on a motorcycle, and as a travel writer, about another 400k on four wheels. I have never yet seen an oil-covered road. I haven’t driven on one and I haven’t even heard a friend or family member say that they have driven on one.

      Where do you get these talking points, bro? I ask, because this is NOT a legitimate concern. You’d really rather see our current 33k+ road deaths per year continue because three people per year might get stuck driving on oil??? Guess what, buddy, electric cars will help take oil off the roads in the first place. And if those trucks are likewise automated, the spills will be yet rarer still.

    4. Brian – how about costing in the fact that if my electric vehicle really is fully self-driving, then I can hire it out via the cloud using a future transportation company (maybe Uber or Lyft?). If my take is say $0.50/mile, and it is on hire for 20,000 miles a year, then I get $10K income, and expect a reduced vehicle life expectancy of say four years. My probable total ownership cost after this income is likely to be around $30K for a $58K vehicle.

      But why don’t I just hire out these self-driving vehicles when I need them at $0.55/mile and if I do 15K miles/year that is $8,250/yr – or $33k over 4 years. So at these mileage rates it costs similar to hire when I need, as to buy and hire out my own. But by hiring I don’t have the hassle of parking costs, insuring, fuelling, maintaining, cleaning etc.

      You can begin to see why many self-driving car specialists see private vehicle ownership becoming less and less attractive and hiring from the shared automated fleet as more and more attractive. It also might explain why Google have invested at least $258M in Uber and that both side are talking about the benefits of self-driving cars for the Uber model.

    5. Would you really pay $700/month to hire a quasi-taxi? If so, you could probably do that now. That’s awfully steep in my mind.

      The thing is that batteries and vehicles are going to get cheaper. Tesla’s Model 3 is projected at $35-40k, and with the gigafactory coming online, that’s a very real possibility. Tesla already offers an unlimited lifetime powertrain warranty, so it’s got the lowest cost of ownership of any car ever made, assuming they stay in business (which is a pretty damn big “if”.)

      But you’re right. Especially for people in the city where a parking spot costs money, why the hell would you buy a car (only to store it for $400/month) when you could have 8,000 miles a year for JUST THAT COST. Those who live in the city generally don’t have a driving commute, so it would be cheaper to Uber or Lyft it than even to pay for the parking spot, let alone the car payment, insurance, etc.

    6. > **SAVINGS: $1,000 per year. $12,000 over ten years.**

      Wut?!

    7. My point was that your argument of these electric cars being cheaper is flawed and not guaranteed in any way.

      The world does not live in Nevada or California. Being in Washington state, you should be very familiar with a constant state of rain, and the occasional days/weeks of snow. And being a motorcyclist, you should know that oil spills, gravel, wet leaves, and other slippery items are a constant danger.

    8. One point: The federal tax credit is actually $7,500, not $2,500.

      Even better :)

    9. Electric cars = no oil on roads? Seriously?
      What do you expect to use to keeps those moving parts lubricated?
      Hope?

      Just quit thinking too hard about it and use the oil.
      Oil: it’s what’s keeping your electric powered engine from ceasing up.

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