"Moody's upgrades Tesla Auto Lease Trust 2018-A Notes". Is this a financial post? No. I want to instead point out the reason *why* Tesla got this upgrade:
"The upgrades were prompted by strong residual value performance of the underlying lease contracts"
Teslas have famously low depreciation. ISeeCars calculated Model S depreciation at a third that of..
But that's not how total cost of ownership (TCO) works. At all.
Purchase price differences *are not a cost*. If you buy a car for $X dollars, then turn around and sell it for $X, you've lost nothing. It's depreciation that costs.
But you really don't need to go through all that to see the difference. Looping back to leases: just check monthly payments.
There is of course some nuance, such as tax credits (makes EVs even more affordable), interest (adverse to more expensive vehicles), etc. But the overall picture is clear: depreciation, not purchase price, dominates cost of ownership.
But why low depreciation?
* Teslas are aspirational cars. Try tuning in a realtime Twitter stream for the word "Tesla". Apart from the TSLA / TSLAQ chatter it's a flood of people writing things like, "OMG, the Uber that just picked me up is a TESLA! SO COOL!!!"
* While not every Tesla battery model has performed the same, most have shown superb longevity compared to other EVs - hundreds of k miles.
The simple fact is that this evening's Moody's upgrade is - indirectly - an acknowledgement of a simple fact:
***Sticker shock or not, Teslas are cheap to own***.