Taycan Options Advice

[TDinDC]

And to clarify about lease v. buy, of course that is a personal decision and I would not suggest otherwise.

My strong preference for leasing EVs is that, given the potential pace for change, it is too difficult to predict with accuracy whether an EV in four years time will be worth more than traditional depreciation models would suggest (not likely but possible given supply chain and inflation issues) or far less due to improvements in EV vehicles (which is not certain but a very, very real possibility).

If I buy under those circumstances and the depreciation is greater than expected, I lose. If I lease (so long as I can buy it out at the end if I want), I am protected against that wildcard high depreciation because I can just drop off my key and walk, or, if I don't want anything else or if the value is higher than buyout, I'll just buy then.

Although in the past I have always bought ICE vehicles, I am starting to think that they might be subject to that wildcard depreciation given developments in the EV market (e.g., people might not want ICE nearly as much if the EV offerings and availability improve significantly).

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[f1eng]

1. Big improvements in range;
2. Lower weight;
3. More Efficient (i.e., better non-range performance);
4. Better hardware (e.g., better processors, cameras, etc.); and
5. Better software (I know, I know, we are talking about Porsche here).

The EVs just seem to make giant strides since we are in the early years of their development as compared to the pace of improvement for ICE vehicles, which have been around for so long . . .

Actually the first car Porsche designed over 100 years ago was an EV and electric traction motors have been used on trains and trams for decades. I am not sure there is far to develop the EV traction system - choose different compromises between performance longevity and cost, certainly, and each EV (and train) manufacturer does this already.

My electrical engineering lecturer back in 1969 had been a senior engineer desingning the traction motor system for the London Underground (subway) and the trains were rated on different lines depending on gradient and acceptable motor temperature, it is all quite interesting if you are nerdy like me.

That means the load cases designed for can lead to a different specification, but that is an engineering choice rather than development.

The reason EVs were replaced by IC engines was both the improvement in IC engines (they were dire at first and aren’t all that good even now) and battery verses hydrocarbon fuel cost and weight.

IC engines have got better over the years, when I first started designing racing cars about ⅓ of the fuel energy went into the cooling water and oil, about ⅓ came out of the exhaust as heat and ⅓ made it to the wheels.
Modern hybrid F1 engines have got to nearer ½ the energy from the fuel getting to the wheels (but they don’t sound as good )

Battery improvements are ongoing and a 5% improvement would be welcome but I am not sure how long that will be.

Any differences are more likely, IMHO, to be different engineering compromises chosen between vehicle load cycle, motor and battery and their cooling rather than big improvements, ie compromising one aspect of performance to favour another.

 

[TDinDC]

Yes, I'm not meaning to suggest that the car will be obsolete in the sense that it will not still be a great car. Not at all. I mean from a financial and desirability standpoint. I really do think the iPhone is a perfect example.

Four years ago, Apple introduced the iPhone X. It's still useable and may be great for many, but we are up to the iPhone 13 at this point, so the value of the X on the second hand market is greatly, greatly diminished, and I very much appreciate the improvements in the iPhone 13 so would have traded anyway.

I don't feel that way about ICE vehicles. My Club Coupe is 16 years old, and it is a naturally aspirated manual 911 that I would not give up for a new 911. Sure, the new ones are great and better, without question, but I actually prefer the naturally aspirated smaller vehicle that feels analog rather than digital. Its value is significantly higher than what I paid for it. I just don't think the odds are the same for the Taycan (which is what I use to scratch my digital itch).

 

[TDinDC]

Actually the first car Porsche designed over 100 years ago was an EV and electric traction motors have been used on trains and trams for decades. I am not sure there is far to develop the EV traction system - choose different compromises between performance longevity and cost, certainly, and each EV (and train) manufacturer does this already.

My electrical engineering lecturer back in 1969 had been a senior engineer desingning the traction motor system for the London Underground (subway) and the trains were rated on different lines depending on gradient and acceptable motor temperature, it is all quite interesting if you are nerdy like me.

That means the load cases designed for can lead to a different specification, but that is an engineering choice rather than development.

The reason EVs were replaced by IC engines was both the improvement in IC engines (they were dire at first and aren’t all that good even now) and battery verses hydrocarbon fuel cost and weight.

IC engines have got better over the years, when I first started designing racing cars about ⅓ of the fuel energy went into the cooling water and oil, about ⅓ came out of the exhaust as heat and ⅓ made it to the wheels.
Modern hybrid F1 engines have got to nearer ½ the energy from the fuel getting to the wheels (but they don’t sound as good )

Battery improvements are ongoing and a 5% improvement would be welcome but I am not sure how long that will be.

Any differences are more likely, IMHO, to be different engineering compromises chosen between vehicle load cycle, motor and battery and their cooling rather than big improvements, ie compromising one aspect of performance to favour another.

Yep, I'm nerdy and educated as an engineer as well. I'm really focused on uncertainty, and there is a much higher potential for breakthroughs for EVs over the near term (simply because they are the focus now) than there is for ICE vehicles (which nearly every manufacturer has said they are moving away from). Also, keep in mind that the improvements don't even need to be actually available in the market for it to impact used EV prices . . . it just has to be on the horizon and it would suppress prices . . .

 

[f1eng]

Also, keep in mind that the improvements don't even need to be actually available in the market for it to impact used EV prices . . . it just has to be on the horizon and it would suppress prices . . .

I am an idiot in this respect. I have never considered resale on any car ever
I just buy what I want and usually keep it a long time and am hoping the re-buildability of the Taycan battery will make it have acceptable longevity (for me)

 

[TDinDC]

It may seem like I’m debating, but I’m actually not as I don’t think there is a wrong answer.
The sole reason why my 911 has appreciated is that it is a very limited edition (it is based on the 997) because it is one of only 50, and one of only 6 with the aero kit from the factory.

 

[TDinDC]

Haha. I thoroughly enjoy cars, particularly racing them, but I would strongly prefer to go incognito. I would love to have a hologram of a yugo while driving in public (as opposed to a racetrack).
I enjoy driving something like a minivan like a bat out of hell (yes, I have drifted one we used to have past an Alfa Romeo driver who annoyed me) over a 911, because when I misbehave in a minivan, I am either ignored or crazy (and crazy is fun), but when I misbehave in a 911, I am noticeable and an @sshole. Haha

 

[Sidicks]

And to clarify about lease v. buy, of course that is a personal decision and I would not suggest otherwise.

My strong preference for leasing EVs is that, given the potential pace for change, it is too difficult to predict with accuracy whether an EV in four years time will be worth more than traditional depreciation models would suggest (not likely but possible given supply chain and inflation issues) or far less due to improvements in EV vehicles (which is not certain but a very, very real possibility).

If I buy under those circumstances and the depreciation is greater than expected, I lose. If I lease (so long as I can buy it out at the end if I want), I am protected against that wildcard high depreciation because I can just drop off my key and walk, or, if I don't want anything else or if the value is higher than buyout, I'll just buy then.

Although in the past I have always bought ICE vehicles, I am starting to think that they might be subject to that wildcard depreciation given developments in the EV market (e.g., people might not want ICE nearly as much if the EV offerings and availability improve significantly).

I’m not sure it is quite as straightforward as you suggest.

Clearly the lease company is directly exposed to the residual values, and given the uncertainty, will take a margin on the expected future value, in order to protect itself. In other words the pricing of your lease assumes a lower residual Value than they actually expect.

Effectively you are paying a small ‘insurance’ premium to protect yourself against that risk. As with all insurance, you expect to lose over all, but if the extreme outcome actually happens then you will be protected.

Personally I think that is probably a good idea, but there’s no free lunch here!

 

[TDinDC]

I’m not sure it is quite as straightforward as you suggest.

Clearly the lease company is directly exposed to the residual values, and given the uncertainty, will take a margin on the expected future value, in order to protect itself. In other words the pricing of your lease assumes a lower residual Value than they actually expect.

Effectively you are paying a small ‘insurance’ premium to protect yourself against that risk. As with all insurance, you expect to lose over all, but if the extreme outcome actually happens then you will be protected.

Personally I think that is probably a good idea, but there’s no free lunch here!

Absolutely. I've never suggested it is free. But as I pointed out, I can always buy the car out at the end of the lease (at the predicted depreciated amount), sell it (at the actual depreciated amount), and recoup the differential between the predicted depreciation and the actual value of the car at that point, so the "cost" of the lease "insurance" is dramatically reduced. The lease protects you against the actual value being less than the predicted value.

Now, Tesla has stopped allowing you to buy out the car at the end of the lease. Do you think I will ever lease (or even buy a Tesla) again? No way. That's an unfair twist on the leasing game unless they assigned super low depreciation rates, but it still annoys me that they have removed that flexibility.

Also, I appreciate that leasing in Europe may not be subject to the same rules, so we may be speaking past each other due to differences in how leasing works there versus here.

 

[Sidicks]

I looked into the money factor for the lease, and learned that the Taycan 4S Cross Turismo has the best money factor because Porsche is predicting that this model will suffer the least depreciation.

Hasn't it been the GTS models that have typically been the lowest depreciators (ignoring Porsche GT models)?

Also, normally the residual values are set for the basic model and little, if any, benefit is given for options. If you’ve loaded up your car with options, by leasing you will be paying full value for those options and not getting any benefit from a higher residual value.

 

[daveo4EV]

worrying about depreciation on an unnecessary new-vehicle purchase -

 

[Sidicks]

Absolutely. I've never suggested it is free. But as I pointed out, I can always buy the car out at the end of the lease, sell it, and recoup the differential between the predicted depreciation and the actual value of the car at that point, so the "cost" of the lease "insurance" is dramatically reduced.

A very good point if you have that option to buy the car effectively at a below market rate at the end of the lease.

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