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Audi '15 A8 Is a 868-Mile-Range Tesla-Killer, and Diesel Is the Secret

About that cost of operation: In the event that the Audi A8 diesel were to actually achieve 40 mpg in an annualized real-life experience as opposed to a day's test drive, the annual fuel cost could be $1,200.  Basically, the average American's annual 12,000 miles driven, divided by 40 mpg, is 300 gallons.  Multiply by $4 per gallon and you have $1,200.

Annual fuel cost of $1,200 is very low compared with depreciation on a $100,000 car.  In an electric car, you also have the unique component of a big battery, which loses meaningful capacity every year, unlike an internal combustion engine.

In an electric car with 265 miles of range, that battery is often reported as costing $30,000, which is subject to a variety of caveats, but still. Let's assume that the battery salvage value after 10 years is $10,000.  That means you will have depreciated $20,000 over 10 years, or $2,000 per year.

But the Audi A8 diesel's annual fuel cost could be as low as $1,200.  In other words, even if you assume that the cost of electricity is zero, that $100,000 electric car is already more expensive to run than this 40 mpg diesel limo from Audi.

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Actually, while we're at it, let's estimate the annual electricity cost to run that large $100,000 electric car for a year.  A car like that can go approximately 3 miles per kWh.  For the 12,000 mile per year average, that means 4,000 kWh.  At the nationwide average of 12 cents per kWh, that means $480 per year.  Add to the $2,000 annual battery depreciation, and you have $2,480 in annual operating cost, exclusive of depreciation and service.

That dollar figure is still peanuts compared with all sorts of things, including the total cost of ownership of the car, but nevertheless:  $2,480 for the Tesla versus $1,200 for the Audi A8 diesel.  That's twice the money -- for a car with one-third the range and much longer refueling times, from far fewer charging stations.  In other words, the Audi A8 obliterates the Tesla in all the most relevant comparisons: cost of operation, range, refueling time and convenience.

As a result, it goes without saying that Audi isn't worried about competition from Tesla.  Instead, the Audi A8's main competition comes from the other large limousines with spacious and comfortable rear seats.

The primary competition is BMW 7-series and Mercedes S-Class.  Right behind those are the Lexus LS, Hyundai Equus and Kia K900.

The three factors that set the Audi A8 apart are:

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