fan of the unde...'s  Instablog

fan of the underdog
Send Message
family guy who's just trying to make the world a better place for his kids and maybe himself.
  • Tesla's Gen III Has Convinced Me To Get A Nissan Leaf 6 comments
    Aug 12, 2013 2:47 AM | about stocks: TSLA

    That's right folks, a non-existent future Tesla (NASDAQ:TSLA) vehicle has convinced me to get one of their competitor's current vehicles. Why? Because it exists today, makes economic sense right now, is currently affordable, and makes sense enough that I want to get them while supplies last - before everyone else gets one after seeing the logic of it all. And it didn't have to be a Nissan (OTCPK:NSANY) Leaf. It could've been a Ford (NYSE:F) Focus EV, or a Honda (NYSE:HMC) Fit EV.

    By now most readers have probably already heard how great the model S is (range not-withstanding), and how affordable the gen III will be, so I won't rehash their attributes (existing or otherwise). But why settle for a range-crippled version of what an electric vehicle could be in the above listed cars?

    The catch is with the automotive Lease. Starting just a few months ago, every manufacturer that produced an electric vehicle started slashing their lease terms to (what appears to be) unprofitable rates. So low that consumer reports thinks "it is the most enticing way of getting into zero emissions motoring virtually risk free"

    Since I spend over $300 per month ($400 if gas prices rise to $5 a gallon) in gasoline alone (commuting in a minivan sucks), those leases make huge financial sense. And I didn't have to give up range to gain this reduction in consumption either. The minivan sits over at my parent's place (they have the driveway space) for the times when we need to drive further than 40 miles. Commute in the EV during the weekdays, and the minivan during the weekends. This math would work for anyone in a similar situation.

    There were over 550,000 minivans sold last year. And about that many every year back to a long time ago, of which ~20% are Toyota Sienna's. If you believe Toyota's claim that "80% of Toyotas sold in the last 20 years are still on the road today", then that translates to 800,000 Toyota (NYSE:TM) minivans from the past decade alone! If we assume 1 in 10 commute to work alone in their guzzling minivan, then we have a ready market for 80,000 commuter ev's ... just from the Toyota minivan drivers (I drive a Honda). I'm sure the SUV commuters would benefit from the same gas savings and would only contribute to the EV demand. Year-to-date EV sales are at over 40,000 and rising (June saw 500 more ev's sold than May).

    So why bring up minivans and leases in a long article about Tesla? And how does this relate to the number crunchers who have analyzed (ad nauseum) the p/e ratios, bookings, gross margins, etc (I defer to Sal's article for the Long's, and Marko's for the Shorts? Because, minivan and suv soccor-moms & dads represent a significant portion of the gen III market. Based on the above minivan sales numbers, there will be over 10 million that can be retired by 2017, with 1 million more every year following. We have toddlers now that won't need car seats in 3 years. When I go on road trips with my kids, stopping every 2 hours for a bathroom break is a must, why not charge up while we're at it (especially for free, since every penny counts!).

    Continuing on the line of costs, I bought my minivan for $28k in 2008. Over the past 5 years, I've spent over $20k on fuel alone. Maintenance and tune-ups were pretty low at $2000 (haven't hit the 100k-mile tuneup yet). Add them all up, and I've already spent $50k on my vehicle, and will most likely spend another $20k in the next 5 years. So for future families cross-shopping a $20k gas minivan/suv (or even a $25k gas sedan) to a $40k sedan is a no brainer. The math worked for me up to $50k.

    When I decided on the lease, I did it with the intent of ditching the Leaf and getting a gen III (or whatever's cheaper AND better at that time). I'm sure all other lease signers had the same intent. The lease represents a bridge that we're using to get to the EV world without any commitment to stay in it. And if we stay, it will be in whatever's available at the end of that lease ... maybe it'll be a gen III, or maybe something else.

    Regardless of how you look at it, the market for the gen III or similiar competitor vehicle is huge, but the only ones that would be relevant are either made by Tesla or licenses Tesla's superchargers, since even the level 3 quick-charger fails to compete - recharges "only" 65 miles in 30 minutes.

    The only downside to this is if there are no ev's that are under $40k with 180+ mile range. If that's the case, then my plan B is go back to spending $300 / month on gas ... or lease another commuter ev for $200 / month.

    Of course, there's also the option of the model X?!

    Disclosure: I am long TSLA.

    Additional disclosure: But I've also hedged my position on the way up.

    Stocks: TSLA
Back To fan of the underdog's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • kickgas
    , contributor
    Comments (125) | Send Message
     
    Very well said. I enjoyed your instablog.
    15 Aug 2013, 01:29 AM Reply Like
  • fan of the underdog
    , contributor
    Comments (852) | Send Message
     
    Author’s reply » Thank you for reading and commenting!
    15 Aug 2013, 10:26 AM Reply Like
  • Samuel H
    , contributor
    Comments (485) | Send Message
     
    I think the 2019ish Gen IV small SUV will suit this market a little better than the Model E sports sedan.
    11 Sep 2013, 02:00 PM Reply Like
  • fan of the underdog
    , contributor
    Comments (852) | Send Message
     
    Author’s reply » Good speculative point (ignoring the obvious about having no details to speculate off of), but the difference between a 4-seat sedan and a 4-seat cuv would be the additional cargo capacity of ~2 cubic feet. I'm working on an analysis of coefficient of drag vs. fuel economy. And based on initial numbers, the mileage drops by 25% (applies to EV's especially) for every 0.05 increase in Cd ... about the difference between a sedan and suv. That may become a significant trade-off issue.
    11 Sep 2013, 06:13 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (7575) | Send Message
     
    Make sure to get a LEAF with the Chademo plug (fast charging).

     

    More and more stations coming online:

     

    http://www.chademo.com

     

    US is a bit behind, has about 200 stations soon.
    15 Aug 2013, 01:47 PM Reply Like
  • fan of the underdog
    , contributor
    Comments (852) | Send Message
     
    Author’s reply » And limit myself to that standard? When my 3rd year plans are for a gen3? Nah. I don't have money to throw $2000 away like that.

     

    For the 55-65 miles I commute in a day, the regular 3.3KW built-in charger is enough.

     

    The only thing I've committed to is a 50amp nema 14 outlet. Besides Nissan's deploying the chademo's throughout their dealerships. Why spend money where I don't have to right?
    15 Aug 2013, 11:36 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.