Tesla Lease

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
madbrain
Posts: 7177
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: Tesla Lease

Post by madbrain »

EricGold wrote: Mon Apr 01, 2024 9:39 pm I just had a look at the Tesla Powerwall. With gateway and inverter included, it is $9,300 before tax credits for 13.5 kWh. That works out after federal tax credit to
$467 per kWh, gateway and inverter included
Hmm. My math says $482/kWh. Close enough.
Regarding location, they can go anywhere but it would be a good idea to shade one in full max sunlight
Thanks. I priced an order for 5. Including CA sales tax and installation, it comes to $46,878. After 30% tax credit, it would be $32,815.
That's $486/kWh. Less than I expected. I'm not working right now so it's a bit unaffordable on disability. We are getting more outages, though, and it would be nice to have a battery. Last week, someone knocked down a power pole while driving, and put 4048 customers out of power, including us. Of course this happened at night time. We were out for 4 hours. This is a roughly annual occurrence.

There may not be enough tax liability to take that much credit in 6 years when I need the battery if I never work again. It used to be the 30% federal tax credit would rollover, but only up to 5 years. Apparently, this may have changed with the Inflation Reduction Act, and leftover credit now carries over indefinitely. So, this may be viable. It looks like I have until 2032 to take the tax credit, but it will probably be in 2029 or 2030, before I get switched to NEM3.
Topic Author
vk22
Posts: 139
Joined: Wed Jun 17, 2015 10:40 pm

Re: Tesla Lease

Post by vk22 »

On safety, what is your opinion on a toyota prius vs a much larger SUV like Tahoe or even a mid size Lexus RX?

Prius is rated top safety pick, but I think they do the safety evaluation based on collision with a a similar size/weight vehicle. Even if the Tahoe is not rated top safety, it could be a better vehicle to be in, in a collision with Prius?

Is this the right way to think about safety?
CletusCaddy
Posts: 2741
Joined: Sun Sep 12, 2021 4:23 am

Re: Tesla Lease

Post by CletusCaddy »

Here in the Bay Area I am seeing base Model Y and 3 leases priced at $420/month plus tax with no down payment.

These are very attractive prices relative to buying with cash, especially for folks like me who make too much for the purchase tax credit.
CletusCaddy
Posts: 2741
Joined: Sun Sep 12, 2021 4:23 am

Re: Tesla Lease

Post by CletusCaddy »

As a follow up to my last post, here is how I think about buy vs lease math:

If I purchased the new base Model Y I would pay $40k as I don’t qualify for the Fed income tax credit. Let’s ignore sales taxes for now. Three year old Standard Range Model Ys with 30k miles are listed by dealers right now for $30k. Let’s assume as a private party sale I could only get $27k. That is $13k in depreciation over three years.

Next we have to calculate cost of capital. The mean value of the car held over three years is $33k. If I paid with cash I am foregoing 5% guaranteed return. So that is $33k * 5% * 3 years = $5k cost of capital.

$13k depreciation + $5k cost of capital = $18k cost of ownership by buying cash.

Leasing only costs $15k in monthly payments + $1k in acquisition/disposition fees.

Last item is sales tax. When you lease you only pay sales tax on the portion of the car value that you “use”. When you pay cash you pay sales tax on the full value of the car, and in CA at least you don’t get any of it back when you sell the car, whether that’s 3 or 10 years from now. So another $1-2k in favor of leasing.
User avatar
just frank
Posts: 1988
Joined: Sun Nov 02, 2014 3:13 pm
Location: Philly Metro

Re: Tesla Lease

Post by just frank »

CletusCaddy wrote: Sat Apr 06, 2024 11:49 am As a follow up to my last post, here is how I think about buy vs lease math:

If I purchased the new base Model Y I would pay $40k as I don’t qualify for the Fed income tax credit. Let’s ignore sales taxes for now. Three year old Standard Range Model Ys with 30k miles are listed by dealers right now for $30k. Let’s assume as a private party sale I could only get $27k. That is $13k in depreciation over three years.

Next we have to calculate cost of capital. The mean value of the car held over three years is $33k. If I paid with cash I am foregoing 5% guaranteed return. So that is $33k * 5% * 3 years = $5k cost of capital.

$13k depreciation + $5k cost of capital = $18k cost of ownership by buying cash.

Leasing only costs $15k in monthly payments + $1k in acquisition/disposition fees.

Last item is sales tax. When you lease you only pay sales tax on the portion of the car value that you “use”. When you pay cash you pay sales tax on the full value of the car, and in CA at least you don’t get any of it back when you sell the car, whether that’s 3 or 10 years from now. So another $1-2k in favor of leasing.
Since new EVs will be dropping in prices, the depreciation will likely be larger than estimated, making leasing an even better deal.

In many cases, the residual on the lease is computed as above, making it a bad deal for the dealership, and a good one for the customer.

My Bolt EV is already well under the residual after less than 24 mos on the 39 mos lease.
cmr79
Posts: 1351
Joined: Mon Dec 02, 2013 3:25 pm

Re: Tesla Lease

Post by cmr79 »

A lot of the home battery price is because, in addition to the batteries themselves, they either need integrated or separate inverters to be functional. There are probably ways to be more efficient/less redundant if you are designing a really big system, like a 70 kWh system would be. On the other hand, it might make sense to hold out for a future EV with V2L a long with a V2L-capable EVSE. Technologically, these exist today...but in practice, they are still really rare.
ScubaHogg
Posts: 3621
Joined: Sun Nov 06, 2011 2:02 pm

Re: Tesla Lease

Post by ScubaHogg »

Angel of Empire wrote: Sun Mar 31, 2024 10:35 am

EV technology may be better in 3 years for you to shop again, but it's more likely that EVs will mostly disappear. They'll never be more than a niche product.
EVs aren’t there yet, but there is zero chance they will disappear. Battery tech is improving at such an astonishingly rapid pace it’s a question of when, not if, ICE vehicles are all but displaced.

The above reads like someone in 1985 saying personal computers will never be more than a niche
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
madbrain
Posts: 7177
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: Tesla Lease

Post by madbrain »

cmr79 wrote: Sat Apr 06, 2024 2:29 pm A lot of the home battery price is because, in addition to the batteries themselves, they either need integrated or separate inverters to be functional. There are probably ways to be more efficient/less redundant if you are designing a really big system, like a 70 kWh system would be. On the other hand, it might make sense to hold out for a future EV with V2L a long with a V2L-capable EVSE. Technologically, these exist today...but in practice, they are still really rare.
My use case for the home battery is two-fold :
1) flattening/shifting electric load from the peak hours to the off-peak hours
2) have power during outages

The primary use case is the first one. I don't think this would work unless the EV is at home all day & night.
I'll certainly look for V2L/V2G/V2H on our next EVs, though. Not quite time for replacements yet.
cmr79
Posts: 1351
Joined: Mon Dec 02, 2013 3:25 pm

Re: Tesla Lease

Post by cmr79 »

madbrain wrote: Sat Apr 06, 2024 2:40 pm
cmr79 wrote: Sat Apr 06, 2024 2:29 pm A lot of the home battery price is because, in addition to the batteries themselves, they either need integrated or separate inverters to be functional. There are probably ways to be more efficient/less redundant if you are designing a really big system, like a 70 kWh system would be. On the other hand, it might make sense to hold out for a future EV with V2L a long with a V2L-capable EVSE. Technologically, these exist today...but in practice, they are still really rare.
My use case for the home battery is two-fold :
1) flattening/shifting electric load from the peak hours to the off-peak hours
2) have power during outages

The primary use case is the first one. I don't think this would work unless the EV is at home all day & night.
I'll certainly look for V2L/V2G/V2H on our next EVs, though. Not quite time for replacements yet.
A smaller home battery system used primarily for #1 plus larger EV batteries with V2L for #2 would probably make the most sense, when V2L becomes commonplace. That is my own personal plan/hope, anyway. Granted, it is more of an interest than a need for me as we have old fashioned net metering without high solar penetration in my area, so we invested in a home battery system along with solar more to deal with nuisance short power outages rather than load shifting/TOU reasons.
madbrain
Posts: 7177
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: Tesla Lease

Post by madbrain »

cmr79 wrote: Sat Apr 06, 2024 3:08 pm A smaller home battery system used primarily for #1 plus larger EV batteries with V2L for #2 would probably make the most sense, when V2L becomes commonplace. That is my own personal plan/hope, anyway. Granted, it is more of an interest than a need for me as we have old fashioned net metering without high solar penetration in my area, so we invested in a home battery system along with solar more to deal with nuisance short power outages rather than load shifting/TOU reasons.
I just looked up V2L and it looks like it has only 1.8 kW peak power at 120V. That's very little power. And you use it for any 240V loads. Does not seem very practical for anything other than load shifting, and even then, it won't be much when the peak solar generation is about 15 kW AC. My solar is producing 15,744 W as I write this. Peak time of the day.
Peak consumption is about 20 kW with both cars charging and the hot tub or cooking.
Not sure what the max power on a Tesla powerwall is - or 5 of them.
cmr79
Posts: 1351
Joined: Mon Dec 02, 2013 3:25 pm

Re: Tesla Lease

Post by cmr79 »

madbrain wrote: Sat Apr 06, 2024 3:19 pm
cmr79 wrote: Sat Apr 06, 2024 3:08 pm A smaller home battery system used primarily for #1 plus larger EV batteries with V2L for #2 would probably make the most sense, when V2L becomes commonplace. That is my own personal plan/hope, anyway. Granted, it is more of an interest than a need for me as we have old fashioned net metering without high solar penetration in my area, so we invested in a home battery system along with solar more to deal with nuisance short power outages rather than load shifting/TOU reasons.
I just looked up V2L and it looks like it has only 1.8 kW peak power at 120V. That's very little power. And you use it for any 240V loads. Does not seem very practical for anything other than load shifting, and even then, it won't be much when the peak solar generation is about 15 kW AC. My solar is producing 15,744 W as I write this. Peak time of the day.
Peak consumption is about 20 kW with both cars charging and the hot tub or cooking.
Not sure what the max power on a Tesla powerwall is - or 5 of them.
You might be looking up stats for an individual outlet in an EV, or something like the adapter in a Hyundai Ioniq 5/Kia EV6 (though those are actually rated to 3.6 kW). EV batteries have no trouble discharging at rates of hundreds of kWs, so the limitation is how things are currently implemented, not how they could be implemented in the future. Ford's "Intelligent Home Backup" with the F150 Lightning is an example of how a useable system could look, though in practice getting these set up (due to proprietary system pieces and a poor installation network for them) has been anything but a success story. That is rated for 9.6 kW via an EVSE, which is how I would ideally like a future system for myself to work and would be enough power to meet my needs
madbrain
Posts: 7177
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: Tesla Lease

Post by madbrain »

cmr79 wrote: Sat Apr 06, 2024 3:41 pm You might be looking up stats for an individual outlet in an EV, or something like the adapter in a Hyundai Ioniq 5/Kia EV6 (though those are actually rated to 3.6 kW). EV batteries have no trouble discharging at rates of hundreds of kWs, so the limitation is how things are currently implemented, not how they could be implemented in the future. Ford's "Intelligent Home Backup" with the F150 Lightning is an example of how a useable system could look, though in practice getting these set up (due to proprietary system pieces and a poor installation network for them) has been anything but a success story. That is rated for 9.6 kW via an EVSE, which is how I would ideally like a future system for myself to work and would be enough power to meet my needs
Thanks. 9.6 kW would more than suffice during power outages. When the cars are not charging, we rarely exceed that. Still possible if cooking, drying, and using the sauna and hot tub at once. But we can refrain from some of those :-) Although the hot tub heater can come online at any time unless we turn off the breaker. It looks like the current version of the Tesla Powerwall maxes at 7 kW. That's probably enough for outages, too. For load shifting, I would need at least 2 of them.
vfinx
Posts: 666
Joined: Thu Apr 19, 2018 9:35 pm

Re: Tesla Lease

Post by vfinx »

CletusCaddy wrote: Sat Apr 06, 2024 11:49 am As a follow up to my last post, here is how I think about buy vs lease math:

If I purchased the new base Model Y I would pay $40k as I don’t qualify for the Fed income tax credit. Let’s ignore sales taxes for now. Three year old Standard Range Model Ys with 30k miles are listed by dealers right now for $30k. Let’s assume as a private party sale I could only get $27k. That is $13k in depreciation over three years.

Next we have to calculate cost of capital. The mean value of the car held over three years is $33k. If I paid with cash I am foregoing 5% guaranteed return. So that is $33k * 5% * 3 years = $5k cost of capital.

$13k depreciation + $5k cost of capital = $18k cost of ownership by buying cash.

Leasing only costs $15k in monthly payments + $1k in acquisition/disposition fees.

Last item is sales tax. When you lease you only pay sales tax on the portion of the car value that you “use”. When you pay cash you pay sales tax on the full value of the car, and in CA at least you don’t get any of it back when you sell the car, whether that’s 3 or 10 years from now. So another $1-2k in favor of leasing.
Lease acquisition fee would be a good thing to add into that calculation ($700 for Tesla). If you assume a comparison as “buy and sell after 9 years vs lease three times” then that adds $2k. It also eliminates the sales tax advantage since you end up with more than 100% depreciation over three leases.

If someone does not actually want to lease for other reasons (always having a new car, etc), then an immediate lease buyout with a brand that allows for it, would likely be a better way to hack the ev credit.
alfaspider
Posts: 4883
Joined: Wed Sep 09, 2015 4:44 pm

Re: Tesla Lease

Post by alfaspider »

Angel of Empire wrote: Sun Mar 31, 2024 10:35 am I'd walk (run) away from the Tesla.

EV technology may be better in 3 years for you to shop again, but it's more likely that EVs will mostly disappear. They'll never be more than a niche product.

Congrats on the 15 year old Toyota. We'll never see the day when someone owns a 15-year old EV.
Original Tesla roadster owners would beg to differ.
CletusCaddy
Posts: 2741
Joined: Sun Sep 12, 2021 4:23 am

Re: Tesla Lease

Post by CletusCaddy »

vfinx wrote: Sun Apr 07, 2024 1:01 pm
CletusCaddy wrote: Sat Apr 06, 2024 11:49 am As a follow up to my last post, here is how I think about buy vs lease math:

If I purchased the new base Model Y I would pay $40k as I don’t qualify for the Fed income tax credit. Let’s ignore sales taxes for now. Three year old Standard Range Model Ys with 30k miles are listed by dealers right now for $30k. Let’s assume as a private party sale I could only get $27k. That is $13k in depreciation over three years.

Next we have to calculate cost of capital. The mean value of the car held over three years is $33k. If I paid with cash I am foregoing 5% guaranteed return. So that is $33k * 5% * 3 years = $5k cost of capital.

$13k depreciation + $5k cost of capital = $18k cost of ownership by buying cash.

Leasing only costs $15k in monthly payments + $1k in acquisition/disposition fees.

Last item is sales tax. When you lease you only pay sales tax on the portion of the car value that you “use”. When you pay cash you pay sales tax on the full value of the car, and in CA at least you don’t get any of it back when you sell the car, whether that’s 3 or 10 years from now. So another $1-2k in favor of leasing.
Lease acquisition fee would be a good thing to add into that calculation ($700 for Tesla). If you assume a comparison as “buy and sell after 9 years vs lease three times” then that adds $2k. It also eliminates the sales tax advantage since you end up with more than 100% depreciation over three leases.

If someone does not actually want to lease for other reasons (always having a new car, etc), then an immediate lease buyout with a brand that allows for it, would likely be a better way to hack the ev credit.
Already included acquisition/disposition fees in my post.

Leasing three times vs buying and holding for nine years has other things in favor of leasing. For one thing the leases come with warranties and potentially maintenance included. You might never have to buy new tires with leasing. And then of course you are never driving anything older than 3 years old with leasing.
vfinx
Posts: 666
Joined: Thu Apr 19, 2018 9:35 pm

Re: Tesla Lease

Post by vfinx »

CletusCaddy wrote: Sun Apr 07, 2024 1:15 pm
vfinx wrote: Sun Apr 07, 2024 1:01 pm
CletusCaddy wrote: Sat Apr 06, 2024 11:49 am As a follow up to my last post, here is how I think about buy vs lease math:

If I purchased the new base Model Y I would pay $40k as I don’t qualify for the Fed income tax credit. Let’s ignore sales taxes for now. Three year old Standard Range Model Ys with 30k miles are listed by dealers right now for $30k. Let’s assume as a private party sale I could only get $27k. That is $13k in depreciation over three years.

Next we have to calculate cost of capital. The mean value of the car held over three years is $33k. If I paid with cash I am foregoing 5% guaranteed return. So that is $33k * 5% * 3 years = $5k cost of capital.

$13k depreciation + $5k cost of capital = $18k cost of ownership by buying cash.

Leasing only costs $15k in monthly payments + $1k in acquisition/disposition fees.

Last item is sales tax. When you lease you only pay sales tax on the portion of the car value that you “use”. When you pay cash you pay sales tax on the full value of the car, and in CA at least you don’t get any of it back when you sell the car, whether that’s 3 or 10 years from now. So another $1-2k in favor of leasing.
Lease acquisition fee would be a good thing to add into that calculation ($700 for Tesla). If you assume a comparison as “buy and sell after 9 years vs lease three times” then that adds $2k. It also eliminates the sales tax advantage since you end up with more than 100% depreciation over three leases.

If someone does not actually want to lease for other reasons (always having a new car, etc), then an immediate lease buyout with a brand that allows for it, would likely be a better way to hack the ev credit.
Already included acquisition/disposition fees in my post.

Leasing three times is not comparable to buying and holding for nine years. For one thing the leases come with warranties and potentially maintenance included. You might never have to buy new tires with leasing. And then of course you are never driving anything older than 3 years old with leasing.
Missed that acquisition fee in your post, thanks.

Lots of highly individual factors I think when trying to compare leasing vs buying (tires and how hard you drive your car being a perfect example, predicted cost of repair is another). I am a serial leaser myself. But my spreadsheets (highly personalized to me) where I try to account for all expenses still show leasing as being more expensive if one needs to posses a car for more than a couple lease terms. Even in the glory days of lease hacking with 65% residuals, leasing was still ultimately more expensive vs owning long term (the difference is smaller than people think though). Agree that it’s not apples and oranges, and there is subjective value in having a new car all the time. The sales tax has definitely been worse with leasing for my situation though.
Post Reply