October 20, 2019 by Paul Fosse
This week I read a series of tweets that inspired me to write this article about reducing transportation costs and how they can fundamentally change the private transportation market .
I had this crazy thought in the shower today.
Currently, shipping costs $ 1– $ 2 per mile. The biggest components of this price are gasoline and human labor.
They will be eliminated at the exact same moment. The cost of transportation will go for free, then negative pic.twitter.com/U2QC67B5qP
– Steve Jobs Ghost 👻 (@tesla_truth) October 15, 2019
This received me thinking about total cost of ownership. We write a lot here about the total cost of owning CleanTechnica because it is important to educate people that a higher priced car may have a lower cost of ownership depending on the fuel, maintenance and more. and depreciation costs.
The thing I notice is missing is that we have no cost to the driver. In all our articles on TCO, we assume that the driver is free. Well, in my first economics course, I learned that even if you don't have to pay to drive your car, there are possible costs or "the value of the next most valuable alternative use of this resource." For example, depending on the day, instead of driving, I may want to work in my software engineering job or I would like to sleep so I rest well when I get to my destination or maybe I just want to watch a show on Netflix or catch up with emails and social media. I have these options if I take Lyft or Uber, but if I drive myself, I can only drive.
What is the value of my time? It varies according to the person and the task you could do, but I think for most people it would be worth at least $ 10 an hour. If you put 15,000 miles a year in your car and an average of 30 miles an hour while driving, you'll spend 500 hours a year, with a cost of $ 5,000 a year, or $ 25,000 for a 5-year period. Steve Jobs Ghost is right that this is the highest price for driving a car.
He said fuel was the second largest expense. My data shows that depreciation is greater than fuel, but fuel is the third largest expense. It is well known that EVs dramatically reduce fuel costs (at least this is known by readers of this website). I usually think $ 1,000 a year is a good figure, but if you want a more accurate answer, here's an article that should help.
Then let's talk about depreciation. Thanks to its work, Tesla, extending the life of a car to a million miles, improving battery chemistry (see here and here) and designing engines to withstand a million miles (available now) can significantly reduce depreciation. What are the reasons for paying less for a used car that leads to depreciation?
- The car is partially worn. If the main parts of a car are good for a million miles, you won't feel worn out after 75,000 miles.
- The car looks dated because new ones have been restored. This happens less often with Tesla vehicles, since Tesla doesn't make much cosmetic changes to its cars, and if you want your older Tesla to look like new, you can find a shop that can update the exterior species.  The older car does not have the characteristics of the new ones. 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 don't have improved Autopilot hardware).
- The car you buy has some wear. Tesla makes its cars quite durable, but things get scratchy and cling to use.
- Used vehicles often have shorter warranty or no warranty.
In light of the above points, I would expect Tesla cars to depreciate more slowly than many other vehicles in terms of mileage only, but still suffer an average withdrawal based on time / years. This means that they will be relatively more economical for people who drive miles than people who put a few miles on their cars.
How about other property costs? Insurance is certainly based on the likelihood of causing human or property damage to the owners or others. Tesla's leading safety record must reduce damage levels for owners and others alike. As this has been proven, insurance rates will fall to reflect the increased safety of the vehicle.
I also wrote about how low the cost of maintaining Tesla here and here.
Thus Tesla works to radically reduce all vehicle ownership costs. This is part 1. From another part.
If you don't need to own a vehicle, you can just call Robotox when you need one. Then you don't have to endure the depreciation of the car for 23 hours a day that you don't need. This brings us a second observation on this topic by Steve Jobs Ghost:
Here it is cheap enough that others will put a price to get you into the store for the price of other products. We have advertiser-supported television (traditional TV that you get with antennas). You have those places that offer you free Disney tickets if you are presenting them on a temporary basis (not in the will). In May, I wrote about free shipping supported by advertisers here. What new models of advertiser support will be generated by a large reduction in shipping costs?
This series of Tweets certainly gave me some thought. Maybe it gives you an idea that you can use to promote your business or start a business. Post in the comments how reducing transportation costs changes things for you or the community at large.
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