# Tesla S/X/3 costs & demographic study



## MelindaV

I came across this yesterday when on Teslarati's site and found it interesting. For me, most surprising was what they stated was the annual average income level of $160k USD for Model 3 reservation holders. I would have expected it to be much lower, maybe because my income is significantly less than that and I can easily afford an optioned Model 3. That and X owners income is nearly double that of S owners.
See the link for more then let me know if you were surprised by the same.

http://www.teslarati.com/survey-model-x-owners-income-double-model-s/


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## Michael Russo

Thanks, @MelindaV , I had not paid so much attention to this one as the title did not mention Model ≡...
Understand your point about average income. By comparing that metric to selling price of the 3 models, one could have expected it to be at least 20-30% lower...
Although, I guess that, to consider paying on avg. $48k for a car, _unless prospective buyers are true EV enthousiasts_ (for one or more reasons), if may not be that surprising that you'd want to have close to 3-3.5x that amount in annual income rather than 2-2.5x...


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## MelindaV

Not specifically on this forum, but on testa's or TMC, I've seen many reservation holders say they will only get the standard $35k and if they can't get their local tax credits / rebates they would not be able to afford it. AND for US specific reservations have seen some admit their tax obligation is less than $7500 so would not be able to get the full credit.
and with a quick average household income in the US, came up with the following:


> US Household Income. According to the Census ACS survey, the median household income for the United States was *$55,775* in 2015


so the Teslarati article eludes to the average Model ☰ buyer will be 3x the median income.


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## Michael Russo

MelindaV said:


> (...) I've seen many reservation holders say they will only get the standard $35k and if they can't get their local tax credits/rebates they would not be able to afford it.(...)
> (...) so the Teslarati article eludes to the average Model ☰ buyer will be 3x the median income.


Indeed... which in itself is what you'd expect of the average 3 Series/A4/C-class buyer... Let's see...
Check this out (1999 data!)
'_In the U.S., the mean household income across the BMW line is $163,000, ranging from $140,000 for 3-series buyers to $260,000 on the 7-series.'_
http://m.wardsauto.com/news-analysis/wanna-buy-bmwbrand-equity-defines-its-allure


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## Guy Weathersby

[QUOTE="MelindaV, post: 14936]

so the Teslarati article eludes to the average Model ☰ buyer will be 3x the median income.[/QUOTE]

At the risk of picking nits, comparing an average income to a median income somewhat exaggerates the situation. The average US income is around $75,000. Also most people's ability to estimate their own income is problematic.

Still the difference is a bit worrisome for widespread BEV adoption. One factor may be that risking $1000 for a chance to wait for years for a product that they have not really seen may well be more daunting for a person of average income than for folks with more cash. I hope that as the Model 3 actually becomes available, its acceptance will be more widespread.


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## Red Sage

This is the part where I like to point out: It doesn't matter if the Model ☰ is a car for _'most people'_ or not. Truthfully, neither are the Honda Accord or Toyota Camry. That's because _'most people'_ in the U.S. purchase used cars.

Over 17,000,000 new cars, with an average price of $33,000 were sold in the U.S. during 2015. That same year, over 38,000,000 used cars, with an average price of $18,000 and aged over 10 years each were sold. Apparently, _'most people'_ would rather buy something that is _'new to them'_.

You have to sell new cars before there can be any used cars to sell to _'most people'_. It will be a long time before _'most people'_ are able to _'afford'_ a ten-year-old Model ☰. Let's not worry about _'most people'_ right now, OK?


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## Michael Russo

Red Sage said:


> (...) You have to sell new cars before there can be any used cars to sell to _'most people'_. It will be a long time before _'most people'_ are able to _'afford'_ a ten-year-old Model ☰. Let's not worry about _'most people'_ right now, OK?


Interesting perspective and useful data... I would only add I don't remember anybody up to now expressing a worry, @Red Sage ...








 

I believe we were mainly observing the average Model ≡ buyer seems to have a higher income than the median (and average) yearly income in the US, as is the case for targeted competitive ICE cars. And that there may be some who earn < $160k per year who nevertheless will be able to afford an nicely equipped Model ≡!

Which is great news!


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## TrevP

I find the trend of potential EV buyers counting on or coming to expect that EVs will always come with some kind of incentive or rebate disturbing. Rebates are nice to get, don't get me wrong as we're quite fortunate in Ontario to have some of the best in the world (a rebate in the literal sense of the word), but if you're counting on getting one to make the car affordable then maybe you shouldn't be considering it?

The US tax credit for example is very much misunderstood with most thinking it's a real rebate instead of what it really is: a tax input credit against federal taxes owning. Not everyone will qualify for the full amount!!

Then you have GM disingenuously advertising the price of the Bolt as $30000 (after incentives) whereas Tesla is pricing the Model 3 as if the tax incentive doesn't exist. At least they're setting everyone up for the real cost of the car.


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## Red Sage

TrevP said:


> ...if you're counting on getting one to make the car affordable then maybe you shouldn't be considering it?


Exactly.

I do harp on affordability quite a bit. I tend to vehemently disagree with most people as to what that actually is... Especially those who insist they are _'able to make the payments'_ or that living within their means is somehow _'impossible'_ to achieve.


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## MelindaV

it does seem many feel the need to be financially extended as much as a lender(s) permits them to be.


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## Johnm6875

Red Sage said:


> Exactly.
> 
> I do harp on affordability quite a bit. I tend to vehemently disagree with most people as to what that actually is... Especially those who insist they are _'able to make the payments'_ or that living within their means is somehow _'impossible'_ to achieve.


I have seen a desire by some for less expensive vehicles for the "masses" but it seems Tesla only needs to offer cars that are competitive and appealing for 500,000 people for a few years. That's all they can make right now. And, in the not too distant future, the "masses" may not even buy an inexpensive car if Ride-Sharing makes sense.


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## TrevP

MelindaV said:


> it does seem many feel the need to be financially extended as much as a lender(s) permits them to be.


I see this a lot where I live. So many people buying huge houses and multiple expensive cars. Money is cheap right now so it's easy to be lulled into getting credit.


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## TrevP

Johnm6875 said:


> I have seen a desire by some for less expensive vehicles for the "masses" but it seems Tesla only needs to offer cars that are competitive and appealing for 500,000 people for a few years. That's all they can make right now. And, in the not too distant future, the "masses" may not even buy an inexpensive car if Ride-Sharing makes sense.


I have my doubts about ride sharing, not from the tech aspect but from the social acceptance aspect. How many in our age group would actually forgo owning a car and just summon one? Not me, I like owning a car. But my daughter who turns 16 this summer has absolutely no interest in owning a car let alone getting her drivers license. I offered to pay for it and she says "no, I'm good. I use the bus to get around". Freedom it seems has changed drastically since I was a kid.


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## garsh

TrevP said:


> But my daughter who turns 16 this summer has absolutely no interest in owning a car let alone getting her drivers license. I offered to pay for it and she says "no, I'm good. I use the bus to get around". Freedom it seems has changed drastically since I was a kid.


Yep. I had to force my 17yo son to get a driver's license. He has no interest in driving, ever. We're raising the Uber/Lyft generation.


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## Steve C

TrevP said:


> I have my doubts about ride sharing, not from the tech aspect but from the social acceptance aspect. How many in our age group would actually forgo owning a car and just summon one? Not me, I like owning a car. But my daughter who turns 16 this summer has absolutely no interest in owning a car let alone getting her drivers license. I offered to pay for it and she says "no, I'm good. I use the bus to get around". Freedom it seems has changed drastically since I was a kid.


It's really crazy. Back when you had your driving test on your birthday date because you didn't want to wait 1 more day... guess those days are gone.

I am also hoping that this new generation will use my 2nd Tesla I just put my deposit on to do exactly that... ride share. Wish me luck! lol.

I can always cancel if the situation changes (Or transfer the deposit onto the Y)


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## Badback

I have always enjoyed owning a car. I think that it is the freedom to go anywhere on a whim, with no delay, no planning and no obligation to others. 

Long winded part follows: When I was vary young I drove cars lent to me by my parents, they were not cars that I would have chosen, but the freedom was exhilarating. My first real car, one that I picked and owned, was a 1966 MG-B that I purchased new in Paris for $2200. I was in the Army at the time, stationed in Orleans. The money came from my re-up bonus. Reenlisting for 4 more years allowed me to spend another year in France. I never regretted this decision. I brought the MG back to the US with me but eventually traded it.

For me the 'getting there' has always been just as important as the destination.

The ≡ and possibly a Model Y later, will be the last cars that I buy. Although I enjoy travel by car, I really don't drive much anymore.
So, I expect the Tesla to last for as long as I will need a car. I could never bring myself to but another ICE car. I see all of the ads on TV and none of them are the slightest bit appealing to me.


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## InElonWeTrust

Interesting comments above about the change in generations as related to driving. I took the bus the first couple of years of college and hated every minute of it. All I wanted was to get a car. Now, when my 3 arrives, there is no way I'd let anyone outside of my own circle of trust be in it. Kudos to those that can monetize it, though!


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## garsh

The most expensive vehicle I ever bought was my Honda minivan. I believe it was about $27k in 2009 ($30k in today's dollars). And that was to keep the wife happy - I didn't really want another minivan, and didn't really want to spend Honda money (domestics were cheaper).

The Leaf was $35k, but PA and Federal incentives dropped that down to $24k ($25k in today's dollars). I bought a Dodge car and a Chevy minivan new as well, but all of my other vehicles have been used. I've never spent a lot of money on vehicles.

The 3 will be by far the most expensive vehicle I've ever purchased. And I'm probably going to go full-mid-life-crisis and get the Ludicrous version (assuming that pushes me to the front of the line - I'll probably go with whatever set of options gets me my vehicle quickest).


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## MichelT3

I was about to agree with @garsh, except that I certainly won't go for Ludicrous and that I'm perfectly happy to wait a little longer. To get rid of the first flaws and to get functioning safely fully automated driving. Enabling me to save some more money.

The Model 3 will certainly be the most expensive new vehicle I ever bought. I own cars since 1977, but I only bought 2 small ones new in my life. All others have been bigger and second hand. I also tend to keep my cars a long time. Between 5 and 26 years... 
So, I expect to keep my Model 3 a long time too...


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## garsh

MichelT3 said:


> ...and that I'm perfectly happy to wait a little longer.


You don't have to worry about missing out on a $7500 tax incentive by waiting too long. That will pay for a lot of options.


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## MichelT3

garsh said:


> You don't have to worry about missing out on a $7500 tax incentive by waiting too long. That will pay for a lot of options.


Of course depending on changes in our tax legislation. Which is uncertain because we're having elections this March. 
It could matter whether I receive my Model 3 in December 2018 or in January 2019. But that's also uncertain right now.


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## Daliman

I find the initial income figure hard to accept. I expect it is actually quite a bit lower. I find the discussion about cars interesting. I got my lisence just after I turned 16, everyone in my small town did it was a passage into semi-adulthood. My 15 yr old son has very little interest but it is a life skill and not a choice. I hope the world evolves so ridesharing makes it less important. I may invest in a second tesla for that in the future.

My first car was a new Mustang that I bought after my first year in the workforce, saved like crazy for it. After I got married cars just became a way to get from A to B and the mix of new and used we have had was chosen for engine life and affordability.

The model 3 will be by far the most expensive and luxurious car I have purchased. It is intended both to last me a long time and fulfil my midlife crisis. But I dont need ludicris mode to do that. Really want the glass roof and some other options. Hoping for but not counting on the Ontario rebate to help out.


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## BigBri

I'd imagine most of us that put down a reservation were Tesla fans to start with. I'm sure there are some newer fans too but a lot of people have been fans of the S and more recently X and dreamed of ways to get one. Might skew the results a bit as the single Mom that's getting one so she can get to work is probably not combing forums and articles. 


I do find it really interesting that kids don't have much interest in driving.. I actually think its a great thing. For me it was a bit of a source of shame. I grew up extremely poor and I had my beginners license but didn't have the money to do driving school nor any relative that could teach and let me use their car. I didn't learn to drive until my early 20s. I lost access to that car (relationship blew up) so I couldn't get my full license then either. Finally did it a couple years ago and it was akin to finally growing my wings and having freedom.


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## TrevP

One of the things I noticed when I was in line to put down my Model 3 deposit when talking to others in the line was most (95%) were not truly educated about Tesla but respected the brand and wanted in on this much talked about car. Keep in mind, NOBODY had even seen the car yet!

I think a lot of them wanted a Tesla but could not afford one but thought a $1000 refundable deposit was a painless (comparatively) way to get in line for whatever Tesla had up their sleeve. Judging from the interest in the car and the reveal event I think the vast majority were quite happy with what they came up with.

On a side note, when my parents return from being snowbirds in April I will do video featuring my dad. He's a big car guy from way back with a small 2-car classic collection. I'll do a tour of the garage and talk to him but most importantly, take him to test drive a Tesla at the new Oakville location. That will make for some good fun!


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## Red Sage

TrevP said:


> On a side note, when my parents return from being snowbirds in April I will do video featuring my dad. He's a big car guy from way back with a small 2-car classic collection. I'll do a tour of the garage and talk to him but most importantly, take him to test drive a Tesla at the new Oakville location. That will make for some good fun!



My Dad died a bit over five years ago. He would have been FASCINATED by Tesla Motors products. But, would not have been too trusting of them, I think. He didn't even trust power door locks or power windows on cars! He was a bit of a tech head, but still preferred things that were manual mechanical or predictable solid state -- products proven in the consumer market. It may have been very hard to drag him to a Tesla showroom, but I would have loved to have the opportunity. I hope your Dad appreciates his journey into... _'The FUTURE!'_


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## garsh

Red Sage said:


> He didn't even trust power door locks or power windows on cars!


They were really unreliable when first introduced.


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## DweezDiesel

TrevP said:


> On a side note, when my parents return from being snowbirds in April I will do video featuring my dad. He's a big car guy from way back with a small 2-car classic collection. I'll do a tour of the garage and talk to him but most importantly, take him to test drive a Tesla at the new Oakville location. That will make for some good fun!


I like how the Experience Tesla sales pitch even serves to subdue the clash of generations... For instance I'm taking my father-in-law, a full-of-dough gas-guzzler type, to a test drive in Avon CT (as you probably know our State has no sales location due to corrupt auto lobbyists). Hoping he becomes the next convert and buys an S or an X so I can also drive it around... TBC...


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## TrevP

Just remember: don't "sell" the car or talk about it too much. The test drive will drive the point home, that's all it takes. Just have a camera ready to record the "Tesla Smile™"

He'll have plenty of questions after the test drive, trust me


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## Daliman

My father worked for Ontario Hydro throughout construction of Bruce nuclear. He passed away many years ago but we used to have intense discussions about the future of power. He maintained it was nuclear and I kept trying to persuade him that solar, free fuel, would take over once the tech got cheap. Would have loved the chance to take him for a spin in my model 3 and show him the solar roof I intend to buy in a few years. I think he would have loved the changes. Hoping that my son never has an IC car in his life.


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## dudeman

@MelindaV May be the average income of model 3 reservation holder is higher than expected because many of them are also S or X owners. If you own S or X its a no brainer to get 3 as well since you get priority plus tax incentives.


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## SoFlaModel3

I don't think it's right to discuss one's income level to others so I'll keep that part out of it, but I too believe the income level will be lower on average.

I remember waiting in line and I was shocked by how many in the line were college students that did not yet have their first job, let alone a career path. They all seemed to share one common thread "it's ok the car is 2 years away so I have time to figure it out". Those kids buying/leasing this car will most assuredly drive down the income level. I do believe we will see a lot of reaching and overextending for this car. People being house/car poor is a far too common a reality in the US today. It all works great while they can make the payment until it all goes horribly bad when one thing happens wrong (losing your job, unexpected sickness, a major appliance breaking at home, etc.).


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## Red Sage

SoFlaModel3 said:


> I don't think it's right to discuss one's income level to others so I'll keep that part out of it, but I too believe the income level will be lower on average.
> 
> I remember waiting in line and I was shocked by how many in the line were college students that did not yet have their first job, let alone a career path. They all seemed to share one common thread "it's ok the car is 2 years away so I have time to figure it out". Those kids buying/leasing this car will most assuredly drive down the income level. I do believe we will see a lot of reaching and overextending for this car. People being house/car poor is a far too common a reality in the US today. It all works great while they can make the payment until it all goes horribly bad when one thing happens wrong (losing your job, unexpected sickness, a major appliance breaking at home, etc.).


Agreed. But... If I were thirty years younger, I'd probably do it anyway. I could buy the car and pay it off fully, only paying for tires, electricity, insurance, and registration fees for a decade beyond that payoff date before buying a house. A much better proposition than even buying a used, off-lease BMW 3-Series every three years for a decade-and-a-half.


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## Red Sage

Johnm6875 said:


> I have seen a desire by some for less expensive vehicles for the "masses" but it seems Tesla only needs to offer cars that are competitive and appealing for 500,000 people for a few years. That's all they can make right now. And, in the not too distant future, the "masses" may not even buy an inexpensive car if Ride-Sharing makes sense.


I expect the Tesla Model 3 will outsell _'cheap' _cars like the Nissan VERSA in 2018, and for several full calendar years thereafter.


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## artsci

These results are probably more driven by the poor quality of the research, largely because the sample sizes were too small and the study was not randomized. A reliable and trustworthy study of Tesla owners would have sampled every nth owner of the roadster, S, X, and 3. This study didn’t, and the fact that the study design and methodology is not provided (generalities don’t count) suggests the amateurism of the research. As best I can tell it was a study of owners who had enrolled with Teslarati (or whoever did the reserarch). Cleary the sample and results are biased in major ways. As a result, these data cannot be trusted. And discussion of the results is much ado about nothing.


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