Electric cars are changing the cost of driving

Few have driven a Tesla to the point at which the vehicle really starts to show its age. But Tesloop, a shuttle service in Southern California comprised solely of Teslas, was ticking the odometers of its cars well past 300,000 miles with no signs of slowing.

The company’s fleet of seven vehicles—a mix of Model Xs, Model 3s and a Model S—are now among the highest-milage Teslas in the world. They zip almost daily between Los Angeles, San Diego, and destinations in between. Each of Tesloop’s cars are regularly racking up about 17,000 miles per month (roughly eight times the average for corporate fleet mileage). Many need to fully recharge at least twice each day.

These long days have pushed Tesla’s engineering to the limit making Tesloop an extreme testbed for the durability of Elon Musk’s cars. Tesloop provided Quartz with five years of maintenance logs, where its vehicles racked up over more than 3.5 million miles, to understand how the electric vehicles (EV) are living up to the promising of cheaper vehicles with unprecedented durability compared to their conventional combustion-engine counterparts.

The results reveal Tesla to be a company still ironing out bugs in its products, but one that pushes the limits of what vehicles can do. “When we first started our company, we predicted the drive train would practically last forever,” Tesloop founder Haydn Sonnad told Quartz. “That’s proven to be relatively true.” He notes that every car except one, a vehicle taken out of service after a collision with a drunk driver, is still running. “The cars have never died of old age,” he added.

It’s difficult to know how representative this data is of Teslas overall, given that Tesloop’s fleet is small, but it likely includes a large share of the highest-mileage Teslas on the road—several are nearing 500,000 miles. Finding conventional vehicles to compare is virtually impossible since most fleet cars are typically sold off after 100,000 miles.

But the implications could be huge. Every year, corporations and rental car companies add more than 12 million vehicles in Europe and North America to their fleets (pdf). Adding EVs to the mix could see those cars lasting five times longer—costing a fraction of conventional cars over the same period—while feeding a massive new stream of used electric cars into the marketplace. Whether the future of fleets is really electric, however, depends on the data. And that’s still in short supply.

The promise of EVs

Most commercial vehicle fleets still run on gasoline and diesel, David Hayward, a fleet expert with Deloitte consulting, said. But EVs are top of mind. “Everyone is excited about it and everyone wants it,” he told Quartz. “But there’s trepidation.” The potential savings are huge. Fleet owners’ biggest expenses after depreciation (44%) are fuel (22%) and maintenance and repairs (11%), according to Deloitte. EVs could slash those by more than half.

But unknowns, as well as the limited number of available models, particularly heavier-duty vehicles, have kept fleet owners on the sidelines. Range and charging infrastructure remain major concerns for fleet owners who must ensure recharging isn’t more difficult than refilling at a gas station for salespeople and corporate clients on far-flung trips (most drivers charge at home or work).

Fleet managers interviewed by Quartz said they didn’t have reliable data on how well EVs performed in fleets. One of the first surveys done on EVs came this March when New York City revealed its first lifetime analysis of fuel and maintenance costs for its light-passenger fleet. It found conventional vehicle maintenance was two to four times higher than the $386 spent EVs. That’s before gas. Some EVs are now selling for less than the median price of a car in the US, such as Kia’s $33,145 electric Soul, or GM’s $36,620 Bolt, and Tesla’s $39,000 Model 3 (before incentives. The savings for owning an EV car is substantial, alongside lower fuel costs and relative simplicity, such as fewer moving parts and less complicated motors.

Fleet economics

Yet pushing fleet vehicles more than 250,000 miles is uncharted territory. Sonnad, who started Tesloop when he was fifteen, says the company’s business model relies on EVs to work. The company has shifted its service from shuttles to Tesla rentals, but says only electric vehicles could keep maintenance and fuel costs under control while maintaining nearly daily trips ranging from 100 to 300 miles year after year.

Tesloop’s maintenance logs show the company has spent at least $152,216 across its fleet of seven vehicles, along with four others it operates but does not own, over five years. Most of the money was spent on normal wear and tear and replacing parts such as tires, windshield wipers, new keys, brakes and fixing actuators, and windshield assemblies.

Not all repairs were minor. Tesloop has also had about six battery replacements across the fleet (all of them under warranty). Sonnad says although the batteries have proved durable, despite degradation, they were swapped out due to factory or installation issues. One Tesloop Model X has seen its original battery’s range fall from 260 miles (23%) to 200 miles after covering 330,000 miles (for comparison, pooled data from Tesla owners shows batteries losing about 10% of their charge after 155,00 miles).

Other hardware issues have come up: two axels ($2,557.12) and a row of seats ($5,375.90) have been replaced, and a new windshield took three months to arrive. Finicky retractable door handles in the Model S have failed (which cost $1,500 to replace), and a flash memory chip that was logging so much data that the car was effectively burning it out (replacement cost $1,800), a common problem.

Tesla’s software also strained under such heavy loads. After a few hundred thousand miles, a software glitch began shutting off batteries prematurely, stranding drivers on the side of the road. Telsa has since fixed the issue.

Sonnad said the repairs, while unexpected, were not surprising after such heavy use of a new product. “The early design iterations are still a liability,” he said. “But they all are remedied by the Model 3.” Sonnad is now switching his fleet to Tesla’s latest vehicle and expects the Model 3 to not only bring down maintenance costs, but ultimately half ownership costs compared to the pricier Model S or X.

How low can it go?

Fleets live or die by their cost per mile. So far, Tesloop’s total cost per mile for maintenance has come in at around $0.06. That’s in line with industry averages for conventional vehicles, says John Wuich, head of fleet analytics for Donlen, a subsidiary of Hertz. But the company’s EVs are logging less time in the garage, since they don’t need oil changes and other services, while blazing far past the 100,000-mile mark after which most fleets sell off cars to keep down the total maintenance costs.

If EVs continued to perform well past this point, the economics of the car market could change. Lower fuel prices and more durable vehicles could, theoretically, push total cost of ownership below conventional vehicles.

Sonnad predicts Tesloop’s Model 3 fleet will see total costs (which includes depreciation, or how much value the car loses before its sold) fall as low as $0.18 to $0.25 per mile after driving past 500,000 miles. That’s less than premium brands such as Mercedes, and even lower than the $0.32 to $0.35 for standard sedans. If high-mileage EVs can be outfitted with cheap refurbished battery packs, Sonnad predicts high-mileage cars that can retain their value will transform the car market collapsing the residual values of used gas cars.

For now, fleet owners are still testing the waters. Wuich, Donlen’s head of fleet analytics, says the company has only about 200 EVs in its fleet. Dain Giese of the rental and fleet management company Enterprise told Quartz that only a small fraction of the 570,000 cars in its North America corporate fleet business run entirely on batteries, and most are with government agencies.

Big questions remain about the cost of replacement batteries (if they must be replaced at all), charging infrastructure, depreciation, and matching the right types of vehicles for customers. But interest is there, Giese argues. “We’re keeping a close eye on it,” he said. “We do think it will be some part of fleet vehicles in the future.”

Comments are closed.

en English
af Afrikaanssq Shqipam አማርኛar العربيةhy Հայերենaz Azərbaycan dilieu Euskarabe Беларуская моваbn বাংলাbs Bosanskibg Българскиca Catalàceb Cebuanony Chichewazh-CN 简体中文zh-TW 繁體中文co Corsuhr Hrvatskics Čeština‎da Dansknl Nederlandsen Englisheo Esperantoet Eestitl Filipinofi Suomifr Françaisfy Fryskgl Galegoka ქართულიde Deutschel Ελληνικάgu ગુજરાતીht Kreyol ayisyenha Harshen Hausahaw Ōlelo Hawaiʻiiw עִבְרִיתhi हिन्दीhmn Hmonghu Magyaris Íslenskaig Igboid Bahasa Indonesiaga Gaeligeit Italianoja 日本語jw Basa Jawakn ಕನ್ನಡkk Қазақ тіліkm ភាសាខ្មែរko 한국어ku كوردی‎ky Кыргызчаlo ພາສາລາວla Latinlv Latviešu valodalt Lietuvių kalbalb Lëtzebuergeschmk Македонски јазикmg Malagasyms Bahasa Melayuml മലയാളംmt Maltesemi Te Reo Māorimr मराठीmn Монголmy ဗမာစာne नेपालीno Norsk bokmålps پښتوfa فارسیpl Polskipt Portuguêspa ਪੰਜਾਬੀro Românăru Русскийsm Samoangd Gàidhligsr Српски језикst Sesothosn Shonasd سنڌيsi සිංහලsk Slovenčinasl Slovenščinaso Afsoomaalies Españolsu Basa Sundasw Kiswahilisv Svenskatg Тоҷикӣta தமிழ்te తెలుగుth ไทยtr Türkçeuk Українськаur اردوuz O‘zbekchavi Tiếng Việtcy Cymraegxh isiXhosayi יידישyo Yorùbázu Zulu