Paul Meloan – Vested Interest

A nice way to put it would be to say I am an electric vehicle (EV) evangelist. If you want a bit more edge you may call me a Tesla #FanBoy.  That’s ok, I’m cool with that. Truth be told I was never a gear-head or that much into cars until the day in 2012 when I sat down into an early edition of the Tesla Model S near Tesla HQ in Palo Alto, California. Five minutes later my world looked different.

How different? You remember the scene in The Wizard of Oz when Dorothy opens the door after landing her house in Munchkin Land? That different. The car was a rocket ship: delivering hundreds of pound-feet of torque right off the line in near silence. Its road manners were excellent for such a big, heavy car. Driving this every day (with the prospect of *not* contributing to climate change while doing it) would be a joy. This car was not a sacrifice, it was a privilege.

I proudly announced to anyone who would listen that internal combustion engine (ICE) vehicles were now dead, they just didn’t know it yet. Eight years after that “EUREKA!” moment I believe it even more.

Of course, like many early editions of whiz-bang toys the early models were expensive at $95,000+. This was not in our budget at the moment with much of our family’s free cash flow going to an expensive private college for our daughter. While I waited for that obligation to be fulfilled, the cars rolled out of Fremont, California on to America’s roads in increasing numbers each year. Remarkably, each iteration got better *and* cheaper. Technology improvements in battery design and manufacture were dropping costs faster than even the most devout evangelists had predicted. When our child graduated in 2015, I was ready to take the plunge.

The weekend our daughter graduated on Saturday, I picked the car up on Sunday.  Five and a half years later it’s still in our driveway (now my wife’s daily driver, although I still use it a lot and enjoy it every time).  Sitting in the garage next to it is a new Model Y that I picked up earlier this month.

All in, I’ve driven several Tesla vehicles almost 100,000 miles in the past five years. They have met or exceeded my expectations in every regard. Our original Model S is easily good for another five to 15 years (not joking) with rock-bottom maintenance (tires, wiper blades, cabin air filter). Most luxury vehicles hit a “maintenance wall” after about 5 years where $1,000 to $2,000 repairs and service visits become the norm. Not Teslas: the simplified design of electric motors with barely any moving parts makes the car maintenance nightmare a thing of the past: no belts, hoses, radiator, oil, transmission, etc to fail.

So what *don’t* I like about them? Well, they are still expensive. There’s no way around it. If you want the best EV you have to pay for it. Thankfully it’s no more expensive than comparable vehicles from Mercedes, Lexus, BMW or Audi. I would argue that over the lifetime of the vehicle it’s significantly *less* expensive. Its depreciation rate over the first five years is well below those other brands. The Teslas of 2021 will all be better cars available for less money than their counterparts of 2012. This is one area where “trickle down” actually works.

Behind them other manufacturers are stepping up to fill the void. As much as I detest Volkswagen Group (the ones who perpetrated the $multi-billion #DieselGate fraud) I must admire their investment to bring EVs to market at all price points. Nissan blazed this trail with the LEAF back in 2013 and I enjoy watching those vehicles evolve.  Even if your budget is <$20,000 there are EVs out there that would make a fine addition to your driveway.

And there will be more. Many more. To paraphrase the late, great Herb Brooks, he would probably say to EVs “This is your time. The ICE car & truck had a nice run for over a century, but their time is over.”  Right now, companies like @Rivian are ready to upend the market for light trucks. @LucidAir is going after Tesla’s crown in high-end, performance luxury vehicles. @Ford just released the EV Mustang!

More will come. Progressive governments in Europe and perhaps even in the U.S. (hello California!) are weighing outright bans on the production and sale of new ICE vehicles, many within a decade.  As well they should: by most accounts personal transportation contributes 20-25% of all the pollution causing climate change.

In our state, like many others, we now have the choice to use 100% renewable energy sources for our electricity at home. While I would love to install photo-voltaic panels on my home, that’s not realisitic for us at the moment. We still have the knowledge that our operation of the vehicle does not contribute to climate change by using “dirty” electricity from the grid.

Right now every part of the legacy automotive industry (manufacture, sales, service) must make a choice: adapt or die.  It’s that simple.  Interestingly enough, the most recalcitrant group fighting Tesla are the automobile dealers.  Tesla’s direct sales model cuts them out of the process, to which I say, “Good riddance.”

Tesla’s sales process is almost as welcome and innovative as its cars.  Go online, pick your options and go.  No haggling, no negotiations. No need to shower immediately after. Give them a $100 deposit and you have an order. You can change your mind at any time up until they give you an exact car & build date. When your number comes up you get an email setting up a time to come get your car at one of its many regoional service centers.

The web site currently estimates delivery time at “1-12 weeks.” I finalized my order for my Model Y in late October and took delivery on December 7 so I think we’re closer to 4-6 weeks in the real world. 12 weeks may be accurate if you live in the sticks where they sell relatively few cars.  Here where I am in metro D.C. they probably get a trailer full every other day.

Delivery is a hoot too. In Covid times you don’t actually talk to *anyone.*  You drive up, your car is sitting out front with the hazards on, get in, sign some papers, put the papers in the drop box, drive away. Took me 15 minutes in & out. No joke. No spending two hours listening to B.S. from the dealer trying to upsell you into crap you don’t need or want.

If Kevin Kelly was correct when he said “the future is already here, it’s just not evenly distributed yet,” he is less and less so each day in the world of passenger vehicles. We can argue (and perhaps we should) about how many cars should be on the road and the role they play in society, but a better way is available right here, right now. It behooves us to utilitze it.

Paul Meloan is the co-founder and co-managing member of Aegis Wealth Management, LLC, in Bethesda, Maryland USA. Before Aegis Paul was a practicing attorney as well as working in the tax practice of Ernst & Young, LLP.

Next Post