Tesla cars have become some of the hottest commodities in the auto industry, and with good reason. Those who want a cutting-edge electric vehicle must understand that this technology is still developing, and as such, costs are somewhat high.
Still, the cost of recharging an electric car is usually a lot less than the price of a full tank of gas. Not only that, but Tesla cars tend to require less maintenance than standard combustion-engine vehicles. With these factors, the true cost of a Tesla becomes a little bit harder to gauge. So, let’s try to settle this question and determine a Tesla vehicles’ total cost of ownership. When you buy a Tesla total cost of ownership will be determined by these four factors: Initial cost, maintenance costs, insurance cost, and fuel costs.
Instead of giving you a vague estimate, let’s look at specific prices. The Tesla Model S is arguably the flagship vehicle of the company, and its price ranges between $74,490 and $79,990. Teslas’ Model 3 is a lot easier on the wallet, selling for a price somewhere between $35,690 and $39,990. The Tesla Model X is a luxury SUV, making it a great family car. Its cost is a bit higher than the Model S, at a range of $79,690 to $84,990. Last but not least, we have the Tesla Model Y, which is a compact sedan. It is priced between $48,690 and $52,990.
Obviously, these cars are not cheap. High-quality goods are always more expensive, especially if they employ the best tech on the market, so we aren’t surprised by this fact. We can already see that the initial cost of a Tesla is quite a bit higher than the initial cost of a gas-powered vehicle. To give you an idea of the difference, the average new car costs about $36,718.
Still, we should mention that you can get a Tesla for less than the average price of a gas-powered car. However, you only have one option, which is the Model 3 with no options or add-ons. In spite of the higher average cost of Tesla vehicles, it is nice to see that they have provided at least one low-cost option.
Tesla owners will be happy to know that maintenance costs tend to be a little lower for these types of vehicles. Electric vehicles just aren’t as buggy as their gas-powered ancestors, and there are fewer things that can go wrong. However, there is one big problem with Tesla maintenance, and that is the fact that most mechanics are not qualified to help you. Even if you choose to take the vehicle to a non-Tesla shop, you could end up voiding the warranty.
Your best bet is to take your Tesla to an official dealer for maintenance. These cars come with a customizable maintenance package, and you can usually get your first few jobs for free or at a reduced rate. Tesla offers a first-year maintenance checkup for about $475, which isn’t actually that bad. For comparison, the average cost of gas-powered car maintenance in 2019 was $1,186. This figure includes both routine maintenance and all necessary repairs.
Based on the above, we can see that owning a Tesla is likely to cut your maintenance costs in half. It might even cut them by a little more than half. That adds up to a total savings of $2,375 over the first five years of the vehicle’s life. So, you won’t save enough money to make the vehicle pay for itself, but you will definitely spend a lot less money on maintenance with a Tesla.
In general, gasoline combustion engines are very prone to problems. The very idea of running an engine on controlled explosions (which is how a combustion engine works) is always going to be fraught with problems. You’ve got a lot of force that has to be contained, and a lot of rough, moving parts. Tesla cars, being electric, have fewer moving parts. That means fewer things that can go wrong.
We can see this when we look at the company’s recommended maintenance checklist, which includes the following:
- Change the cabin air filter every 2 years
- Change the HEPA filter every 3 years
- Rotate, balance, and align the tires every 10,000-12,000 miles
- Test brake fluid for contamination every 2 years
- Service the air conditioner every 2 years
- Clean and lubricate the brake calipers once a year
As you can see, these requirements are very light, and they don’t have to be performed very often. When you compare that to the maintenance requirements of a gas-powered car, there is no comparison at all.
Car insurance costs can be very hard to estimate. This is the case because insurance rates are based on both the vehicle and the individual. For instance, cars that are deemed less safe will probably make your premiums rise. Likewise, drivers with a less-than-stellar driving record will also see an increase in their rates. Still, we can find some average figures on the subject.
Tesla CEO Elon Musk has stated that he wants to make electric cars affordable for everyone. As we have already seen, Tesla has made great strides in that direction. However, they cannot control the actions of the various insurance companies, and that’s why a Tesla vehicle will normally be more expensive to insure.
On average, a Tesla vehicle will cost about $4,350 per year for insurance. Of course, it should be noted that this is an average figure. As a general rule, the more expensive models will cost a lot more. If you are driving a bare-bones Model 3, you will probably get out much cheaper than this.
So, let’s compare that to the average cost of car insurance across the board. Obviously, we will limit our study to the USA because we don’t have time or space to cover every region in the world. Besides, the numbers from the article above are from the USA, and we want to make a good and consistent comparison. According to the people at Nerdwallet, the average cost is $1,427 per year.
That’s not particularly good news for Tesla owners, who will probably end up paying about four times as much for insurance. It is unclear why insurance companies have jacked the rates up so much, but there isn’t much point in trying to learn. Many people feel that insurance companies are deliberately keeping costs high for these particular vehicles. However, it is just as likely that these companies are merely nervous about new technology. Either way, they aren’t going to tell us.
On the upside, Tesla is making efforts to curb this problem. In 2017, they partnered with Liberty Mutual in an attempt to create a Tesla-specific insurance program. This program, called InsureMyTesla, didn’t achieve the desired results, so now Tesla is planning to enter the insurance business. They argue that the advanced safety features of these vehicles should make them cost less, not more.
The autopilot feature has a little bit of an impact on insurance costs. This feature is a little bit controversial because some people believe it to be unsafe. Indeed, the very idea of a self-driving car makes a lot of people nervous. To be fair, Tesla doesn’t make fully self-driving cars, but the autopilot feature is definitely a step in that direction. There have been several accidents involving the autopilot feature, but it has generally been found to be safe. Thus, the attitude of the insurance company has a lot to do with the rates for a Tesla vehicle.
Gasoline is one of the biggest expenses associated with car ownership. On average, the American motorist spends about $2,000 per year on fuel, and this fuel is almost always gasoline. Obviously, this figure will vary quite a bit, but that’s a decent ballpark estimate.
Of course, Tesla vehicles are recharged instead of being refueled. Thankfully for Tesla owners, electricity is a lot cheaper than gasoline. Electricity doesn’t have to be pulled from deep within the earth, and people don’t usually fight wars over electricity, either. To figure out your approximate charging costs, you can use this online calculator.
We need a good example figure, so let’s assume you are driving a Model 3. Further, let’s assume that the price of electricity in your area is 0.11 cents per kilowatt-hour. This number is pretty close to the national average, and so it will give us a good approximation. Let’s assume you drive about 1,500 miles per month, which is the default choice. After putting this data into the calculator, we see that the average user will be paying about $48.00 per month. Multiply that by twelve (for the months of the year), and it comes out to about $576 annually.
At the same time, we would be remiss if we did not mention the extra costs associated with home charging. As you might guess, most home electrical systems are not designed for the kind of power output that an electric vehicle requires. If you tried to charge a vehicle from a standard 120V wall outlet, it would take days or even weeks to attain a full charge. Obviously, this is not acceptable by any means.
You can use several different power adapters to modify your home electrical system so that you can charge a Tesla. Depending on what kind of charger you opt for, you might be able to charge your Tesla in as little as 4-5 hours. There are several sizes of chargers available, and these are meant to suit users with different levels of need. However, these things are not cheap.
It should be noted that the installation of the home charging system is a one-time cost, so it won’t continue to be a problem. It is just another one of the initial hurdles that must be overcome. As for pricing, the standard wall charger costs $500, although there is also a smaller kit for $275.
So, let’s digest these figures and see what we can learn. First of all, we can see that a Tesla vehicle is actually cheaper in some regards than a standard gas-powered vehicle. However, it is much more expensive in some other areas. In terms of initial cost, Tesla vehicles are generally a lot more expensive than a standard vehicle. They only have one low-cost option, and it’s only a little bit below the national average. Overall, you will definitely pay a lot more for these vehicles. The cost of a wall charger (which you will probably want) adds another $500 to the tag.
Even worse, a lot of insurance companies will try to use this vehicle as an excuse to gouge you for every dime they can get. Thus, we would recommend that you either get an insurance plan through Tesla themselves or Liberty Mutual, since that company has worked with Tesla extensively.
Despite these cost issues, you can be pretty sure that your Tesla will save you money on fuel and maintenance. These vehicles require very little maintenance and repair in comparison to their gas-powered equivalents. The cost of charging a Tesla is also several orders of magnitude lower than the cost of gasoline.
We hope you have enjoyed our Tesla TCO comparison. We have attempted to address this topic from a fair and neutral perspective, and we hope that we have answered your questions completely. If so, please fill out the contact form below to learn more.