Pierre-Yves McSween | Do you really need a Tesla?

The takeaway is clear: the Tesla market will experience ups and downs in terms of supply and demand. Other manufacturers are coming up with a competitive offering both in terms of brands and cars. Regardless of the technology that will be infused in your car: the goal is to move. If your car is still in good shape, why trade it in?

Never be an early adopter

The logical choice in personal finance is to stay behind the advent of technology. I’m of the school of following the money first. In marketing, we love early adopters. These are consumers who are ready to purchase an innovative or technological product at a high price in the first years of marketing. They are enthusiasts, they find value in being there.

It is clear that the electric car is no longer in the start-up or launch phase, but it is far from reaching maturity. We are still at the forefront of technology development, production chain optimization and cost management. Gas-powered cars are still widely sold. The auto industry isn’t ready to give up on the profits to be made from gas cars just yet, so we’re selling the idea of ​​buying the “last gas or hybrid car” from dealers.

Arbitration

I personally made the following observation. With reasonable fuel mileage based on limited mileage, an overpaid gas car may make more financial sense than replacing said vehicle prematurely. If going electric is an option based on mileage or a more pressing need, buying the Chevrolet Bolt remains the less prestigious and spacious, but more dollar-wise option.

Let’s not forget that vehicle financing rates in 2023 are often between 6% and 8%. Financing a car between $50,000 and $80,000 costs thousands of dollars in interest payments over the term. Leaving aside the polluting question, would I rather pay the capital and interest on a new electric car, or delay everything by paying fuel bills?

What’s a Montreal renter to do?

There are charging stations in Montreal. There is one on the corner of my street. When we implemented it, no one was using it. Since then, it has been in monopoly almost forever. So the question remains, if you accept the use of an electric car, does that condemn you to plugging in at home? What will tenants do? How will the infrastructure develop? Will a renter have to pay more to charge their vehicle at a commercial facility than an owner with access to a residential charging station?

waiting lists “on steroids”.

Personally, I have put down a deposit on three EVs from three different manufacturers. Will I buy all three cars? Of course not. To be honest, I’m not sure I’ve used any of these deposit options. Since the deposits are refundable, this triple waiting list is rationalized.

Moreover, it is the dealers themselves who encourage undecided customers to increase said deposits. Am I the only one with such a strategy? Of course not. So these waiting lists, in my opinion, create a false sense of urgency: they can be shorter than expected.

Hydro-Québec and the tax authorities subsidize you

Good news for electric car buyers: The Legault government has decided that Hydro-Québec’s rate hikes will be lower than inflation. Therefore, it economically subsidizes electric car users. In addition, when an employee uses his personal vehicle for business purposes, he may be paid a reasonable mileage allowance.

According to Finance Canada (press release dated December 16, 2022)[1] :

  • “In the provinces, the withholding limit for tax-exempt benefits paid by employers to employees who use their private car for work will be increased by 7 cents per kilometer for the first 5,000 kilometers to 68 cents, with an additional 62 sous. kilometers. »

The government’s calculation gives a huge advantage to users who are paid a non-taxable allowance when driving an electric vehicle for business purposes: a full tank of electricity is cheaper than a full tank of gas.

Everything in its time

As I wait for my car to detect the lines of the road under a layer of ice or snow, my wallet tells me to “take your time, take your time.” Yes, but what about the future of your children? I answer them: is it better to pollute by driving an existing vehicle or by producing a new one?

The electric car is not a magic solution, as minimizing consumption remains a collective goal. In the not-too-distant future, Hydro-Québec may charge a higher price per kilowatt-hour for charging electric vehicles. Is that part of your thinking? One day, the bargaining power will return to the hands of the buyer.

Meanwhile, do you really need a Tesla? Maybe, but I’m in no rush.

[1] https://www.canada.ca/en/department-finance/news/2022/12/government-announces-automotive-expense-deduction-caps-and-rates- benefits-of-using-an-automobile-for- .html

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