What if we go from paying for transportation to getting paid to going places?
20. October 2019 by Paul Fosse
This week I read a series of tweets that inspired me to write this article about declining transportation costs and how they could fundamentally change the markets for personal transportation.
I had this crazy thought in the shower today.
Right now, transportation costs $ 1[ads1] – $ 2 per kilometer. The major components of this cost are gasoline and human labor.
These are about to be eliminated at exactly the same time. The price of transport will go for free as negative pic.twitter.com/U2QC67B5qP
– Steve Jobs Ghost ? (@tesla_truth) October 15, 2019
This got me thinking total cost of ownership. We write a lot about the total cost of ownership here at CleanTechnica since it is important to educate people that a car that has a higher price tag can have lower cost of ownership, depending on fuel, maintenance, and depreciation costs.
Costs from my article March 3, 2019
What I notice is missing is that we have no driver costs. In all our TCO articles, we assume that the driver is free. Well, in my first economics class, I learned that even if you don't have to pay yourself to drive a car, it's an opportunity cost, or "the value of the second-highest valued alternative use of the resource." Depending on the day, instead of driving, I might want to work in my software engineer, or I might take a nap so I get well rested when I get to the destination, or maybe I just want to watch a show on Netflix or catch up emails and social media. I have these options if I take a Lift or Uber, but if I drive myself, I can only drive.
What is the value of my time? It varies with the person and the task you can do, but I think for most people would have a value of at least $ 10 an hour. If you put 15,000 miles a year on your car and average 30 miles per hour while driving, you would spend 500 hours a year with an opportunity cost of $ 5,000 a year, or $ 25,000 over a five-year period. "Steve Jobs Ghost" is correct that this is the biggest cost of driving a car. Tesla works hard to eliminate it for the owners.
He said that fuel was the second biggest cost. My figures show that depreciation is greater than fuel, but fuel is the third biggest cost. It is well known that EVs cut fuel costs dramatically (at least, it is known by the readers of this site). I tend to think that $ 1000 a year is a good number, but if you want a more accurate answer, here is an article that should help.
Next let's talk about depreciation. Tesla, by working to extend the useful life of a car to a million miles, by improving battery chemistry (see here and here) and designing engines to last a million miles (available now), can significantly reduce depreciation. What are the reasons why you pay less for a used car and cause depreciation?
- The car is partially worn out. If the body of the car is good for a million miles, you won't feel worn out after 75,000 miles.
- The car looks dated because new ones have been unmilled. This happens less often with Tesla cars, because Tesla doesn't make a lot of cosmetic changes to their cars, and if you want your older Tesla to look like a new one, you can find an aftermarket store that can update the look. [19659016] The older car does not have the new features. Tesla does a great job of giving older cars the same features as the newest vehicles about 90% of the time. Sometimes it can't (like cars built before October 2016 that haven't improved autopilot hardware).
- The car you buy has some wear. Tesla builds its cars to be quite durable, but things get scratched and bulged up with usage.
- Used cars often have shorter warranties or no warranty.
In light of the above points, I would expect that Tesla cars will depreciate more slowly than many other vehicles just in terms of mileage, but still suffer average depreciation based on time / year. This means that they will be relatively more economical for people who drive many miles than for people who spend few miles on their cars.
What about the other cost of ownership? Insurance is certainly based on the likelihood of causing damage to people or property to the owners or others. Tesla's leading safety record will reduce the damage to both owners and others. Once this has been proven, the insurance rates will drop to reflect the car's improved safety.
I have also written about how low Tesla maintenance costs are here and here. The company seems to be doing well in reducing these costs.
So Tesla works to radically reduce all the costs of owning a vehicle. It is part 1. Part 2.
If you do not need to own a vehicle, you can only call a robotic taxi when you need one. You do not have to suffer depreciation on the car the 23 hours a day you do not need it. This brings us to the second observation on this topic from Steve Jobs Ghost:
This is where it gets cheap enough that others will appreciate getting you to the store in the price of other products. We have advertiser supported TV (traditional TV that you get with antennas). You have the places that offer you free Disney tickets if you attend their timeshare presentation (not recommended for the weak will). In May, I wrote about advertiser-supported free transportation here. Which new advertiser-supporting models will be created by a large reduction in transportation costs?
This series of tweets definitely gave me something to think about. Maybe it gives you an idea that you can use to promote your business or start a business. Tell us in the comments how falling transportation costs are changing things for you or the community as a whole.
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About the author
Paul Fosse A software engineer for over 30 years, first developed EDI software and then developed computer warehouse systems. Along the way, I've also had the chance to help start a software consulting firm and perform portfolio management. In 2010, I became interested in electric cars because gas was expensive. In 2015, I started reading CleanTechnica and became interested in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @ atj721 Tesla investor. Tesla reference code: https://ts.la/paul92237ebrit19659034??(function(d, s, id) {var js, fjs = d.getElementsByTagName (s) [0]; if (d.getElementById (id)) return; js = d.createElement (s); js.id = id; js.src = "http://connect.facebook.net/en_US/all.js#xfbml=1"; fjs.parentNode.insertBefore (js, fjs );} (document, & # 39; script & # 39 ;, & # 39; facebook-jssdk & # 39;));
