One month into beginning our journey to financial independence (FI), we nearly liquidated $100,000 of our after-tax brokerage accounts to buy a Tesla Model S. I know I’m new to this, but the financial independence / early retirement (FI/RE) community would probably advise against that decision. But… I mean… have you ever driven a Model S? Ultimately, we decided not to buy a Tesla – at least not yet.
This two-part post breaks down our experience (part 1) and the numbers (part 2) leading to our decision from the perspective of pursuing FI.
I’m a bit of an Elon Musk fan boy. If you love tech and innovation, I feel like it comes with the territory. What he’s done at PayPal, Tesla, and SpaceX, and now exploring with Hyperloop One and The Boring Company is amazing! He’s disrupting the seemingly non-disruptable and making sci-fi real.
I believe I’ll see someone land on Mars in my lifetime in part due to Musk’s ventures and vision. One of the bedtime stories I tell my five-year old involves her becoming the first human to step on the Red Planet’s surface – I see the sparkle in her eye as she imagines the day it becomes reality. Over time we’ll see developments to support the human race becoming multi-planetary species – his penultimate vision.
Cool, so now how you know how I feel about Musk, let’s get back to the Tesla purchasing experience.
Right around the same time we purchased this website, we started giving the purchase of an EV serious consideration. I currently drive an Audi. I purchased the car two-years used, and I’m pretty happy with the deal I got on it. But maintenance on this car is stupid expensive. With my Audi Care maintenance plan expiring, I loathe the anticipated expenses waiting behind every future corner. I want to get rid of it.
In March 2017, the local Nissan dealers advertised a fleet purchase opportunity to own a Nissan Leaf. With this deal, we could get into a Leaf for around $13,000 to $19,000, or about $17,500 worth of rebates off of list price. We find the Leaf and the new EV Chevy Bolt to be very ugly cars, but at this price point, we could get into an EV for a few years with an extremely low total cost of ownership. It was at least worth a look at the Leaf.
Look Mom, No Hands!
I got in touch with a friend who owns two EVs to ask about home charger installation. He idolizes Musk to a whole other level. He and his wife each drive a Model S, he was invited and attended the Model 3 release in California, and I wouldn’t be surprised if he’s currently trying to figure out how to become the first house in Texas to have Tesla solar roof shingles installed. We setup a meeting for us to grab lunch and talk EVs.
On the day of lunch, he shows up outside my office in downtown Austin in his Model S. He’s standing on the sidewalk, his car parked 30 feet away on the side of the road. He asks how much time I have before my next meeting. “I’m good until 2.” “Great, I’ve got a surprise for you!”
All of a sudden, the Tesla, without a driver in it, closes the distance between us and stops just in front of an orange construction cone. This is awesome!
We hop in the car and he lets me in on the surprise – he arranged me to have a Tesla for the day! Apparently, as a Tesla owner, he’s able to bequeath a Tesla to a friend for a 24-hour period. Even more awesome! So off to the dealer we go, driven by the Tesla auto-pilot through downtown Austin roads and construction-laden Mopac highway with traffic – a terrifying and exhilarating experience!
Sorry BMW, You Are No Longer the Ultimate Driving Machine
If you haven’t experienced driving in a Tesla, you’re missing out. Even if you’re not a car lover. The design, the luxury, the feel, the technology, the sound, the acceleration – this is the future, and it’s amazing. We show up at the dealer and get setup to take a Model S P90D for the day, but first, we still need to grab lunch. Well, while we’re there, how about we take the quickest production car in the world to lunch – a car capable of doing 0-60 mph in under 2.3 seconds – the Tesla Model S P100D with Ludicrous mode.
Wait a second… I’m considering a $15,000 Nissan Leaf. All I wanted to do was talk about who he used to install his home charging station. Why am I in a $143,000 electric supercar? Why do my eyeballs feel like this when the car accelerates? Why isn’t everyone driving an electric vehicle? What’s taking the rest of automotive industry so long to actually innovate? What’s a Nissan Leaf?
A Day with a Tesla Model S
I left the office an hour early that day. In part, to beat traffic for both safety and need-for-speed reasons, and to beat Mrs. FI Exec home. She pulls in to find her welcoming husband in front of a $100,000 car parked in the driveway. “Did you buy a Tesla,” she asks in a I’m-going-to-kill-you-kinda way. Nope, but we’re taking it to dinner!
We took the long way with lots of paved, lightly-trafficked roads to get to Kerbey Lane restaurant and their kids eat free on Tuesday special. Every time I accelerated, our kids laughed with glee in the backseat from the feeling. They compared it to the rides at Disney World that we had just returned from the previous month. At dinner, we primarily discussed the feasibility of buying a Tesla, and how completely contradictory it seemed to our goals of being able to retire in 10 years.
Mrs. FI Exec got to drive home. I started running the numbers.
Revisiting the Leaf and Other EVs
Before I get to the numbers, we did decide to check out the Nissan Leaf. It was extremely disappointing. Grant it, it’s not fair to compare a Model S to a Nissan Leaf. They’re not even remotely in the same ballpark. But let’s compare their relative value.
The Tesla Model S is worthy of its price tag. The Nissan Leaf is not. The Leaf offers the features, styling, and comfort of a $15,000 vehicle with an additional $20,000 mark up. Personally, I could deal with the ugly design of the car at the fleet purchase price tag, but Mrs. FI Exec could not. For me, it was a no-go due to the software, limited range, resale, and future EVs yet to be released. The Leaf is a normal car turned electric. The Tesla is an iPhone turned car.
With the Model 3 and the Bolt just being released, the future of electric vehicles is very exciting. Both cars represent a significant milestone of introducing a mass-production electric vehicle with a 220+ mile range. Unfortunately for all of us, GM felt it important that the Bolt not be an attractive car – possibly to control supply and demand and to minimize cannibalization of their higher margin, gas-powered vehicles. Honestly, I can’t fathom what they were thinking when they approved that design.
What About the Tesla Model 3
Since I’m clearly a Tesla lover, real quick regarding the Model 3. I would love to purchase a Model 3, but…
- I don’t want to wait that long – based on current reservations and production capacity, Wired magazine estimates new reservations will be reserved by late 2018.
- I’d be remorsed to buy an electric vehicle and not be able to benefit from the $7,500 government rebate, which is currently only available for the first 200,000 purchases of a vehicle model in the US. The Model 3’s waitlist is supposedly over 400,000.
But there is a way for us to get the car earlier and benefit from the government rebate – buy a Model S.
The Model 3 waitlist is a priority-based system. First priority is Tesla employees. Next is Tesla owners. And then everybody else.
So in actuality, we almost bought two Tesla’s – a his Model 3 and a hers Model S.
Next up: the numbers!