Battery Life Expectancy and Tax Question

Battery Life Expectancy and Tax Question

I apologize in advanced if this has already been posted on the forums, but I scrolled through quite a bit today and have not been able to find this thread.

Currently, I am leaning towards the First Production $49,000 model as I am considering this to be a car that I will own for a long time. Even if I do upgrade to a different tesla or electric car in the future, Tesla has been able to keep a strong value in regards to a buyback versus other competitors.

The two questions that I did have and I am hoping to get an answer from hat I saw as a pretty knowledgeable community;
1. One thing that Elon has raved about in regards to all of the electric cars is the zero up keeping fee that traditional gasoline engines cars would have (Oil, motors expense etc.) Currently, the estimate for all combustion engine cars accumulates to $1,451.50 per year that you would save owning any electric car. But now, I am looking to own this tesla 10 plus years, and that brings me to my question;
What is the life expectancy of the batteries for the Tesla 3 and how much will that replacement cost? If we take the traditional response of $12,000 after an estimated 10 years, your 10 year savings of owning a maintenance free car would only be about $2500.00. Please let me know if I have missed the mark here.

2. And a quick question, want to apologize for the essay type question that was asked above. For those of us that are eligible to get the first, second or third level of the tax credit, is it an actual credit that will give you money back as a potential refund or is it more like you will play less of an income tax? Ex (you make $50,000 but now will only be taxed on $42,500.)

Thanks everyone for any insight that you might have.

KP in NPT | 15 ottobre 2017

Tesla batteries are warranted for 8 years. But if you plan on keeping the car longer than that, and want peace of mind:

Patronus | 15 ottobre 2017

1. Do your own research, but my research has made me conclude that if you take care of the battery on a Tesla you can expect about 5% degradation per 100,000 miles. There are articles about a 300,000 mile Model S that has around 10% degradation. Also, Elon has suggested that the drivetrain is designed for 1,000,000 before major service.

2. It is a tax credit, not a tax deduction as in your example. That means that if you owe $10,000 in tax at the end of the year you purchased the car, your tax bill would be reduced to $2500. If you owe less than $7500 you owe nothing, but do not get a "credit" for what you did not use of the tax credit.

KP in NPT | 15 ottobre 2017


Tax credit means it's the amount you won't pay the government. So if you qualify for the full credit and your tax liability is 7500, you will pay zero in taxes. If your liability is 10K, you'll only pay 2.5K in taxes, etc.

WantMY | 15 ottobre 2017

Tesla is full features (I would say - state of the art) passenger car, the major difference is drive train, but it has A/C, cooling fluid, brake fluid, calipers, pads, rotors, gear box oil, cooling pumps, seals, small 12V lead battery and etc. So, yes you do not need to change motor oil, spark plugs, head gasket, check valve clearance and etc, but the rest is still subject to maintenance. Based on current state of fluids and materials you would not need to do much for at least 3 years.

rxlawdude | 15 ottobre 2017

Realistically, I have my doubts that my TCO of my MS (and upcoming M3) is better than an average ICE vehicle.

Of course, Teslas are far from average vehicles in so many positive ways...

tstolz | 15 ottobre 2017

Your savings will vary depending on how long you keep the car and how much you drive. It is looking like these cars will really last!! So if you keep it longer than a regular ICE the savings will be substantial! My yearly savings so far is about $5,000/yr .. but I drive twice as much as the average. The battery will exceed the life of the car and will still have substantial value once the car is toast.

dd.micsol | 16 ottobre 2017

battery life and range satisfaction will mount on how far you need the car to go. If you push the car to the limits now 300m/day then battery degrading will affect your view of the car. For me, I need to drive 305m to work one way. I prefer to do it without stopping-charge up at work-and head home. I don't make the commute every day. Just once a week. So as long as I can get from a to b with one charge - I love my car. I disagree with poster saying the battery will out live the car. This depends on how you take care of your car. If you galvanize spray it the car will last an amazing amount of time body wise. More to be seen in the future but as for tax depreciation write off-I take 8% a year depreciation off for it and have never had an issue. It's technology assigned like a computer along with a car. My CPA knows how to handle these things. so 12.5 yrs of depreciation.

By that time, I expect to put in another battery pack or a whole new drive train (motors and battery pack brain etc). And yes, I would do it for the new battery tech, range improvement, new power motors. It might set me back 20k on a model 3 or 35k on model S but I would have basically a brand new car with 550m/range theoretically (12 yrs from now). At that time, I'll be 85 and it will be my last car for my life and happily so.

Rutrow | 16 ottobre 2017

dd.micsol, are you planning on getting FSD right off the bat? or waiting until the battery upgrade at age 85? I'd definitely recommend it for your second battery upgrade when you're 97!!! :-)

PhillyGal | 16 ottobre 2017

+1 on the batteries having great longevity. What we don't know yet is the cost to replace a battery. I've never heard of a Model S owner coming out of pocket for a new battery and certainly it'll be a long time before any 3 batteries will be out of warranty. At the rate the costs are dropping, I wouldn't be surprised if $10k 10 years from now will allow for a 400+ mile battery to be plunked into your 2018 Model 3.

As others have said, the tax credit is a credit, NOT a reduction in taxable income. So if you always have the perfect withholding from your pay checks where come tax time you neither owe nor get a refund, you will get a $7,500 refund assuming you've paid that much in taxes. Most people with full time jobs do pay that much.

Rutrow | 16 ottobre 2017

I think most of the tax credit confusion could be cleared up a little bit if everyone would understand the difference between "taxes" and "withholdings".

You don't pay "taxes" every week from your paycheck, rather your employer "withholds" a guesstimate (based on your W-4) percentage of your pay, then they send that to the IRS who hold it in an account for you until April 15th. If your 1040 indicates that you owe taxes, the IRS uses the money in your account to pay it. If there's more in the account than you owe, the IRS "returns" it. That is your "Tax Return". If there isn't enough in your account, you have to send them the balance with your 1040.

The EV Tax Credit is like adding a $7500 gift card to your IRS account. If your tax bill is at least $7500, the IRS will use that gift card to pay your tax liability. If you have real money in your account after that, the IRS will return that money back to you, but they won't send you any money left on that gift card. If you only use a portion of your gift card, the IRS essentially keeps the rest of it.

ptcurt | 16 ottobre 2017

The tax credit is simply subtracted from the total tax you owe for that year. It doesn’t matter how much you have withheld, other than it becoming part of the equation of whether you write a check or they do as in Phillygal’s example.

Mozart | 16 ottobre 2017

I'm not a CPA, but I believe you can carry forward tax credits if you don't have enough tax liability use the credit. Any CPA's out there to clarify this?

andy.connor.e | 16 ottobre 2017

It was my understanding, that if you have a higher tax credit than amount of taxes you pay, you essentially "miss out" on the rest of the credit. The way i've been understanding it (from the 1.5 years of discussion), you get up to $7500 in credit. If you only owe $5000 in taxes, you will use whatever $ amount brings it to zero.

Yodrak. | 16 ottobre 2017

Most people who can afford a Tesla, maybe. But many people with full-time jobs do not have a $7,500 tax obligation.

"Most people with full time jobs do pay that much." [$7,500]

Yodrak. | 16 ottobre 2017

Some tax credits, maybe, but not the EV tax credit.
byrned: "I believe you can carry forward tax credits if you don't have enough tax liability use the credit."

Correct for the EV tax credit.
andy.connor.e: "if you have a higher tax credit than amount of taxes you pay, you essentially "miss out" on the rest of the credit."

dd.micsol | 16 ottobre 2017

rutrow-no, I don't want fsd-it's a complete waste of money unless you want to fund tesla efforts.
people die because they don't pay attention.
I wonder if they have tested the Police car t bone possibility. It happens a lot when there is an emergency call life on line time important respond. Seen 3 of them in my town alone. Police car driving really fast and someone has a green light-can't hear or see that car from 100yards and bamm. Policeman and other car members killed on the spot. only takes 3 seconds to happen. I don't think the Tesla can do that calculation from 300ft away and predict at 90 degrees.
So, I stick to no for FSD and don't want anyone else driving in my car ever (liability issues). If I car pool-I take the maserati.
I do give driving expos in my tesla in my and surrounding towns.

Sandy’s 3 | 16 ottobre 2017

Hey dd.miscol or tsla007 or Tesla 007 your fantasies are boring.

mleonard1 | 16 ottobre 2017

In most cases, your taxable income (adjusted gross income minus deductions and exemptions) must be at least ~$47,000 if you are single and ~$56,000 if you are married filing jointly to take advantage of the full $7,500 federal tax credit. This assumes you don't qualify for any additional non-refundable credits, as the benefit of those would be lost if the $7,500 offsets all your tax.

jordanrichard | 16 ottobre 2017

If one is using TOC as the basis for the decision to buy or not buy a EV, then using that same logic, you wouldn't EVER buy another car. If you are driving a 10 yr old Chevy that gets 18 MPG and the engine blows, spending say $25K on a Prius doesn't make financial sense because a new engine will cost you far less than that Prius.

From a purely financial standpoint which presumably is why people do up these TOC spreadsheets, it makes no financial sense to buy a new car or even a used one. It's always cheaper to repair than replace unless the car was physically mangled to the point of no return.

Rutrow | 16 ottobre 2017

As an emergency vehicle driver myself (Fire Dept. Battalion Chief) I'll tell you that an emergency vehicles should never "bust" a negative right of way intersection. Risk vs Reward calculation cannot justify the few seconds saved by not accounting for each lane of cross traffic you encroach. Anyone who is trying to dream up a exception to that rule is wrong! Even when people are trapped in a burning house can we let that situation allow for a disregard for the safety of motorists or pedestrians on the roads.

But your comment got me thinking... Tesla Auto-Pilots have cameras, radar, and ultrasonic sensors... but do they have microphones??? I know, ultrasonic sensors are essentially microphones, but I wonder if driving computers use audible inputs? I've reacted to screeching tires, high-speed motorcycle sounds, sirens, etc. to avoid hazards I couldn't see. I wonder if Teslas will?

I chatted with an expert on the Tesla Autopilot website, asking about this, he said:

"Tesla is constantly on the cutting edge, and our engineers are absolutely innovative! While there is no limitation to what they can achieve, I can't speculate on what the future features of FSD can do."

At first that sounded like a the canned response of an AI computer, but further questions made him sound more human... Or... did Tesla just pass the Turing Test???

Frank99 | 16 ottobre 2017

>>> but do they have microphones?

I doubt they do currently, but that's a very interesting line of concern. For a human driver, the siren is an indicator of an emergency vehicle "somewhere", and the human is expected to look around, find it, and yield to it if necessary. For an autonomous car, it shouldn't need the warning - it should be looking in all directions simultaneously, and it should be able to identify an emergency vehicle from markings/lights alone.

That said, perhaps it should have the same effect on FSD as humans - if the FSD can hear a siren, but can't see an emergency vehicle, the FSD should perhaps slow down and look more cautiously at potential conflict areas - intersections and the like - until the siren goes away or it identifies the vehicle.

Frank99 | 16 ottobre 2017

By the way, Rutrow, do you recommend any particular action from car drivers to indicate "I see you, and am yielding to you?". Stopping at a green light with an emergency vehicle approaching at 90 degrees with a red light, I sometimes wonder if I should flash my headlights or something to indicate that I, at least, aren't going to get in your way.

Rutrow | 16 ottobre 2017

Thanks for asking Frank. The best way to indicate to me that you've seen me and are yielding the right of way, is to stop well short of the intersection and make eye contact. Most times people will slow down but continue rolling right up to the intersection stop line. But as long as you're moving, I've got to treat you as though you haven't seen me and have to wait for you to pass or finally come to a halt.

While we're talking about it, and I have a captive audience, a few other things to help responding emergency vehicles:
Whenever possible, pull to the RIGHT! (in right lane driving countries). The law orders you to pull to the right*, so if you pull to the left, we have to slow to a crawl to pass you on your right because we have to assume that at any moment you'll remember what the law is, and dash to the right as we're passing you. This is especially important on Freeways.

When you're in an oncoming lane, you should still pull to the right and stop, because you never know if we need to turn left on the street or driveway just ahead of you. Even if we have our turn signal on it's hard to notice with all the other flashing lights on our vehicles.

If you have pulled right and stopped, don't start rolling again until well after we've passed. Many accidents happen when we pass a stopped vehicle and turn right at the next street or driveway to get T-boned by the car we just passed.

On multi-lane freeways, if you pull over from the left lane to let us pass, please don't go to pass the vehicle ahead of you on their right because then they can't pull over for us because you're blocking them. Don't laugh, it happens ALL THE TIME!

My advice** on the freeway, unless there's an exit just ahead of you that I may need to use, don't stop! It's unsafe to stop anywhere traffic behind you is moving at 70+mph. You're best to pull to the right lane and slow down about 20-30 mph below the current traffic speed. That'll give me the chance to get past you, but if the Bozo behind you isn't paying attention (or worse, trying to keep up with me) an accident will be less likely or much less violent.

* Local laws may vary
** I'm advising you to violate the letter of the law*, but it's safer, and no reasonable police officer would ticket you for it.

topher | 16 ottobre 2017

"but do they have microphones?"

They have voice command system. I can't imagine how they do that *without* a microphone.

Thank you kindly.

Rutrow | 16 ottobre 2017

Come on topher, even I admitted that Teslas had microphones (i.e. ultraSONIC) sensors, but my question was whether the FSD computer used auditory inputs to make driving decisions.

Frank99 | 16 ottobre 2017

>>> Whenever possible, pull to the RIGHT! (in right lane driving countries).
Yeah, here in Phoenix nobody seems to know that - everyone comes to a stop whereever they are, in whatever lane they're in. I've watched fire trucks have to slalom through all the stopped cars...

Rutrow | 17 ottobre 2017

"They have voice command system. I can't imagine how they do that *without* a microphone."

Or maybe... that's what the camera over the rearview mirror is for. Teslas read lips!!!