Benzinga - by Anan Ashraf, Benzinga Editor.
Tesla Inc. (NASDAQ:TSLA) bull and investor Ross Gerber and bear Gordon Johnson engaged in back-and-forth on the pros and cons of electric vehicles earlier this week.
What Happened: Gerber, in a post on X, highlighted that drivers can avoid gas costs by switching to an electric vehicle. He mentioned that by switching to a Tesla Model 3, one can save about $4,000 a year on gas alone. “F inflation!,” the bull wrote.
Johnson, however, alleged in his response that Gerber is “cherry-picking” facts. Johnson claimed that EVs significantly drop in value over the years and ultimately cost the customer more due to increased insurance costs compared to a gas vehicle.
“When Ross Gerber tells you how much you’ll save on ‘gas’ buying an EV, he neglects the collapsing value of the car, as well as the sig. premium you’ll pay for insurance,” Johnson said, while adding that the customer will need to spend more for repair and maintenance of EVs owing to the need for battery and tire replacement over time.
How much will this car drop in value in 5yrs, and how much more is the insurance cost vs. an "evil gas car"? #cherrypicking— Gordon Johnson (@GordonJohnson19) April 10, 2024
Gerber, on the other hand, is convinced that gas cars will be “worthless” in five years, contrary to the opinions of EV critics and some automakers like Toyota, which believe EVs will coexist alongside other fuel options instead of replacing combustion engine vehicles.
“Also… given the excess weight, how many more tires will you need, how much will you spend to replace the battery over multiple years, and how much will you spend on maintenance,” retorted Johnson.
Also… given the excess weight, how many more tires will you need, how much will you spend to replace the battery over multiple years, and how much will you spend on maintenance. Again… @GerberKawasaki… pic.twitter.com/JuVrJceTlV— Gordon Johnson (@GordonJohnson19) April 10, 2024
Why It Matters: Despite Gerber’s estimates, Tesla’s website only estimates three-year gas savings of $3,000 on the Model 3.
Johnson is not the first to raise concerns about the depreciating value of Tesla cars. Dropping value and high repair costs were among the reasons cited by car rental company Hertz Global Holdings for phasing out Tesla vehicles from its fleet earlier this year.
Gerber has also previously highlighted the declining value of older Tesla vehicles. Last month, he claimed that older Tesla cars are “underwater,” making trading in an older Tesla for a new one less appealing. He mentioned his willingness to sell his 2020 Model Y Performance variant for just $25,000, despite likely paying over $80,000 for the vehicle.
However, a recent report by Atlas Public Policy suggests that the cost of owning an EV over seven years can be significantly lower than that of a gas-powered vehicle across various factors.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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