True cost of Tesla ownership can now be calculated

by philg

Tesla is offering leases for the Model 3. The stripper version (“Standard Range Plus”) is supposedly $39,500 to buy. It can be leased for $2,000 “down payment” plus $545 per month for 36 months and 12,000 miles per year. In other words, $600 per month.

What does a conventional sedan cost? US News says a Nissan Altima, which is about the same size as a Tesla 3 and has awesome ratings, is about $300 per month (depending on region). The Nissan comes with the added potential benefit of being able to buy the car at the end of the lease in the event that the value is higher than the predicted residual value (likely worth $1,000? Let’s mark it to zero for this analysis).

[Nissan fit and finish should be way better; UBS found that Teslas were well below average: “The car scored ‘below average’ on the fit & finish quality audit which looked at >1, 500 gap measurements,” UBS’ Colin Langan wrote in the note to clients. “The team also found the body-wind noise was ‘borderline acceptable.'”]

So Tesla costs $300/month more. What does it save in fuel (costs, if not CO2 emissions)? Let’s say that 1,000 miles per month are actually driven. The Nissan will consume 33 gallons of gasoline to go 1,000 miles (EPA combined), about $85 worth at current retail prices.

Electricity here costs 22.5 cents per kilowatt-hour (BLS). People say that the real-world electricity consumption of the Tesla 3 is 300 watt-hours per mile. So it would burn up 300 kwh to go 1,000 miles or $67.50 in electricity (but the Tesla Superchargers cost 31 cents per kwh so it would actually be more expensive than gasoline?).

It seems that the gas versus electricity cost is a wash. So the Tesla 3 costs $3,600 more per year to own than a comparable-size conventional sedan.

Maybe it is a better product? Consumer Reports gives the Tesla 3 a score of 65, with a mediocre rating for noise and a poor rating for ride quality (everyone who has been in our friend’s Tesla X, including the owner, says that our Honda Odyssey has a much smoother and quieter ride). The Nissan Altima rates 76 and actually did deliver its EPA-promised gas mileage in Consumer Reports testing. The only area where the Tesla seems to have beaten the Nissan was in acceleration, being about 2 seconds faster from 0-60 (given our average practical highway speed here in Boston of about 30 mph, the relevance of this number is unclear).

How about the autopilot? The Nissan puts virtual fences around the human driver, but does not attempt to drive. Consumer Reports liked the Tesla autopilot overall, but put in some caveats: “Some drivers may be frustrated by how the system operates, because too much pressure on the steering wheel will turn off Autopilot. So drivers must be careful to put some pressure on the wheel, but not too much. The system can be operated in many situations that it is not designed for. For instance, it can be engaged on a curvy back road with only a single lane marking. In such cases, it operates erratically rather than restricting Autopilot’s operation.”

Assuming that the autopilot actually did work perfectly all the time, then we could say that people are paying $300 for every 1,000 miles to have the autopilot drive for them. If it takes 30 hours to go 1,000 miles, it is a $10/hour system.

Finally, let’s look at the three-year cost to lord it over the neighbors with one’s all-electric virtue:

  • $10,800 in extra lease payments
  • $1,000 in expected trade-in value for a lease with the right to purchase (our 2014 Honda Odyssey was worth about $2,000 more to the dealer than agreed-on residual value)
  • $1,200 to install a charger at home (probably closer to $2,000 here in Massachusetts)

Grand total: $13,000 (enough to earn a pilot certificate and do a bunch of family trips in a flight school rental aircraft during those three years, yet I am willing to wager that plenty of Tesla 3 owners would say that they can’t afford aviation as a hobby!).

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23 thoughts on “True cost of Tesla ownership can now be calculated”

  1. In the SF area, many employers offer free charging stations, so much reduced cost of charging overall.

    Another benefit is the special carpool lane stickers that allow the owner to occupy the lanes while driving solo.

    Don’t own a Tesla myself, will buy an EV when I can nab one for cheap used.

  2. For starving programmers who can’t afford a new car every 3 years, driving a gas car for 20 years was horrifically more expensive than a Tesla. Just no chargers for renters, so it’s another penalty for being poor. We all know what gas is heading towards in another 20 years.

  3. When I looked at the Model 3 last year I was very disappointed in the engineering and quality. The interior is strange with that center only display and cheap. Plus CR found big issues in several places. Back then the price was over $50K. Then when I tried to see why it was so expensive I was shocked at how many small batteries and battery related parts are in this small car. The 2170 battery is so small it takes 4416 of them to power a Model 3-LR and 2976 for the M3 SR. Then when you add the liquid cooling the battery system weighs 1054 pounds. Based on these numbers I bet the battery costs at least $8K per car. Way too expensive for a economy car and no way out without a major redesign.

    https://en.wikipedia.org/wiki/Tesla_Model_3

  4. Tesla Motors is a religion, not a car company. Your facts and reason and logic won’t sway the true believers. Keep it up and you’ll be exiled as an eco heretic.

  5. On the gasoline vs electric, you are using very expensive prices for electricity and cheap prices for fuel, which is misleading. The average electricity price for all US states is about $0.1247 (https://www.chooseenergy.com/electricity-rates-by-state/), so those 300 kWh will become $37.41. The average gas price is about $2.53/gallon, so 33 gallons become $94.94. So on average, an electric car is about 2.5 times cheaper to run per mile. In Oklahoma it is about 3.3 times cheaper. In Norway, where gas is about $6.5/gallon, it becomes about 6.3 times cheaper per mile to go electric. No wonder Teslas sell like hot cakes.

  6. > The stripper version (“Standard Range Plus”) is supposedly $39,500 to buy.

    I know that some strippers make extremely good money, but I’m surprised there are enough to dedicate a whole product line to them.

  8. I like cost per mile better: the Tesla costs around $8 grand a year all up (lease + juice in MA based on your numbers) if you drive the full 12k miles, and that’s not including anything else. You’re at $0.66 per mile driven, whereas the Nissan clocks in at around $0.40 (again, based on your numbers). So every time you drive a mile in the Tesla instead of the Nissan, you should put the car in autopilot while you remind yourself that you just tossed a quarter or more out the window. Once your blood pressure drops, you can take control again.

    I would drive the Nissan and save the money for EZPass. And if you buy your Nissan from a dealer, you get the pleasure of knowing an actual person, whose establishment is probably one of the anchor points of their local Chamber of Commerce and whose cars keep most of the mechanics and service technicians in the area paying their mortgages. And that’s a lot of people. Tesla’s sales model basically amounts to: “Screw those people, they don’t matter.”

    A lot of people want to have that planet-saving virtue but they’re not going to give a rat’s ass about the people who lose their jobs and can’t afford to buy a Tesla … because of Tesla.

    Question: I’d love to see you tackle this one: why is electricity so costly in Massachusetts? Why do we not want to build more power plants? Why is natural gas so much more costly than the national average? Is it just because the MA Government likes to have people who can’t afford to heat their homes in the winter and therefore have to rely on public assistance?

  9. Florida Power & Light charges me only $0.129/kwh. Nonetheless, I’m going to keep my creampuff 19 y/o Ford Taurus 3.0L V6, 30 MPG hwy/ 20 MPG city.

  10. The Prius Prime hybrid, with electric-only for short trips, is looking better and better. Want to use gas for a roadtrip? Sure! Want to use electricity only for short distances? Sure!
    I think plug-in electric is a good choice, for now, if you want to use electricity for your commute. Batteries are just too expensive, and my experience with consumer electronics makes me (very) leery of battery longevity for electric cars. They just don’t last.

  11. You are not counting the value of impressing my neighbors that I have a DeLorean time machine car.

  13. Ouch that’s some overpriced electric you have there. Here in Seattle, we may have $0.10/kilowatt hour, but we make up for it with regulation… charger here in a multifamily building cost $13,000.

  14. Even in Mass, you can get better rates if you are lucky enough to be in one of the towns that owns its own electric utility. I pay about $.0145 here in Wakefield. (Living here has turned my from a theoretical public power enthusiast into a True Believer)

  16. As pointed out in your Tesla X review:
    ‘most of our economy would shut down if people didn’t buy things for irrational reasons…’

    A Tesla is a fashion statement. $300/month does not go that far in a high-end haberdasher. How much does your family spend on clothes? How much less would you spend if you shopped exclusively at thrift stores and Walmarts?

    Conspicuous consumption is fun. It deadens the pain we feel from slaving away at soul-crushing jobs.

    To counter my arguments: Beware the virtuous cheapskate; he masks his shame of being a lazy bum.

    • We would save bigly if we switched our default clothing source from Costco to Walmart! (No more $12,99 T-shirt splurges at Uniqlo either.)

    • philg,
      There is nothing more frustrating to the virtuous cheapskate of necessity than being confronted by the virtuous cheapskate of choice. It is galling to find some people do the right thing by sheer force of moral character.

      Did you hear how copper wire was invented? Two Scotmen found a penny at the same time.

  17. Is there info on maintainability and usefulness of the new Tesla? How often it breaks down, how long the battery lasts, what are battery replacement cost, what are repairs costs, what mileage can it go without major repairs? What shops can do repairs? Smaller electric motors I have used last for about 15 years in regular use. I guess Tesla does not have transmission so one less thing to break and maintain. And no oil change required. Sitting on several thousand of Li ion batteries does not inspire confidence. In my mobile phone elements last for several years at most.

    • The batteries used in a Tesla are much more closely related to those in a laptop computer than a mobile phone.

  18. Jimbo, that Wakefiled electricity bill sounds rather interesting.
    In my neck of the woods it’s also becoming abundantly clear that privately run utilities usually only means that you get to pay bad men more for an inferior product/service.
    https://www.mirror.co.uk/news/uk-news/water-chiefs-losing-quarter-supply-12964348
    is about the water supply,
    https://www.mirror.co.uk/news/politics/jason-beattie-tell-sid-tories-12975201
    is the big picture.
    The american healthcare system is the poster boy for wasting money
    https://www.theatlantic.com/magazine/archive/2019/05/the-trouble-with-dentistry/586039/
    but surely captive audiences paying through the nose for electricity would be another example.

  19. Compare the time and cost of fixing a dented fender on a gas car compared to a similar Tesla.

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