The Tesla Model 3 is the most affordable option offered by the company, and this alone has made it very popular. For most people, the idea of buying an electric car is out of reach from a financial perspective. The more expensive models can be as much as $80,000 (that’s an approximate figure). By contrast, you can get a Model 3 for as little as $35,000. Of course, it isn’t as simple as that, or we would not have written an article on this subject.
In order to determine the total cost of ownership for a Tesla vehicle, let’s consider the issue in terms of four factors: Initial cost, insurance costs, maintenance costs, and fuel costs. Although there are a few lesser factors that can make a difference, these are the four primary determiners of a Tesla vehicle’s total cost of ownership.
Factor 1: Initial Cost
Depending on which options you choose, the Tesla Model 3 can range in price from $35,690 to $39,990. There isn’t a whole lot of variation in this range, mostly because there are only three options available. First is the premium interior, which is mostly a cosmetic advantage. Second, you have the range extension upgrade. This will allow your Model 3 to travel a longer distance on a single charge. If you only get one extra option for your Model 3, that is probably the most practical choice.
You can also get a performance upgrade for your Model 3, and this will increase both its acceleration and its top speed. For those who want to go a little faster and shave some time off their next long drive, this would probably be the most practical choice.
As you can see, the cost of a Model 3 is pretty competitive. Even if you get all the options, it is still less expensive than the average new gas-powered car. It is the only option that Tesla offers in this category, but it seems to be a pretty good one. The price of a Model 3 also compares favorably with electric vehicles offered by other companies. For an electric vehicle, this one is extremely cheap.
Factor 2: Insurance Costs
For a long time, Tesla has had the goal of making electric cars more affordable so that the average person can reap their benefits. There are also obvious environmental advantages to this type of vehicle. Besides that, we are going to run out of oil sooner or later anyway. Even if you don’t care about environmental issues, electric cars make much more sense from a practical perspective.
Unfortunately, many insurance companies have thrown some roadblocks in the way by charging Tesla owners excessive prices for even the most basic policies. In many cases, they will charge you three to four times as much as they would normally do. We don’t know why this is the case, but it probably has to do with doubts about the safety and reliability of the technology.
Overall, a Tesla vehicle isn’t any more dangerous than any other. We say this because vehicle safety is mostly determined by the users. The only thing auto manufacturers can do is make their vehicles tougher so that they can survive a crash with less damage to those involved. In this regard, Tesla has gone above and beyond, even going so far as to provide free titanium under-shielding to protect the lithium-ion battery.
Still, a lot of people are nervous about lithium-ion batteries because they have a higher likelihood of exploding. If you want to know why that happens, you need only look at the chemical properties of lithium. Lithium is one of those elements that are too volatile to exist by itself. In nature, lithium is found only in mixed form. When it is pure, it is highly reactive and potentially explosive. For instance, if you throw a chunk of lithium in water, it will spontaneously catch fire. It may even explode, sending pieces of hot molten lithium and scalding water all over the place.
Of course, a lithium-ion battery is a lot safer than a raw piece of lithium, but it gives you an idea of how reactive this substance can be. However, lithium-ion batteries have become the standard for mobile phones and many other devices. Chances are, you already put one of these batteries right next to your head on a daily basis. Still, the potentially dangerous nature of large lithium batteries is sure to make the insurance companies nervous.
There are also some concerns with the autopilot feature. While this feature does not create a “self-driving car,” as many people say, but it does bring this idea closer to reality than ever before. As part of this feature, Tesla vehicles are equipped with a complex array of sensors and cameras that can detect an impact before it happens, moving the vehicle to a safer location.
On the one hand, the autopilot feature could be dangerous if a driver comes to be too reliant on its protection. On the other hand, the advanced detection capabilities of the vehicle have made it much safer than a standard vehicle….but only if used properly. The autopilot feature is not intended to drive the vehicle for you, but to help you do so. In other words, it is an assistant rather than a servant. Use it as such, and you should be fine.
Tesla has attempted to deal with the insurance issue by offering insurance policies straight from the company. This is probably the best option for Tesla owners, although the company has also partnered with Liberty Mutual in the past. They were working on a project to create better guidelines for Tesla vehicle insurance back in 2017, but that project doesn’t seem to have borne fruit. Still, we know those companies have a good working relationship, so that’s not a bad place to start.
Factor 3: Maintenance Costs
After reading that last section, you might be a little concerned about your insurance costs. Indeed, we devoted special attention to that section because it is the biggest recurring expense that you will face as a Tesla owner. After the initial cost of the vehicle and its accessories, insurance costs will far exceed the costs of maintenance or fuel.
This is good news for vehicle owners who are fed up with unreliable gas-powered vehicles. Overall, the gasoline combustion engine has served mankind very well, but it has never been the most reliable of technology. Because of this, gas-powered vehicles are often in the shop where repairs can cost hundreds or even thousands of dollars.
Even if you disregard the cost of these repairs, the stress and irritation that come from vehicle trouble are not to be taken lightly. Chances are, your last auto malfunction made you very angry and frustrated because you probably had things to do and places to be. That’s why it’s great that a Tesla vehicle will require far less maintenance than a standard vehicle.
If you look at the maintenance recommendations from the company, it is a list of very small tasks that shouldn’t cost very much. In addition, these maintenance tasks only have to be performed once every 1-3 years, which is really nice. When was the last time you went three years without needing to repair your gas-powered car? For that matter, have you even gone a single year without needing to take your car to the shop? We’re willing to bet that the answer is a big fat nope.
Just so you know how little work we are talking about here, we can cover all of the maintenance tasks in this relatively short article. Let’s go over them one by one.
- Cabin Air Filter: Cheap, easy, can be done by anyone. Replaced once every 2 years.
- HEPA Air Filter: Cheap, easy, can be done by anyone. Replaced every 3 years.
- Tire Rotation, Balance, and Alignment: Must be done at a tire shop, usually costs somewhere between $60 and $100. Should be done every 10,000-12,000 miles.
- Brake Fluid Test: Cheap, easy, can be done by anyone. You just check the fluid every 2 years to see if it’s contaminated.
- Air Conditioner Maintenance: The desiccant in the air conditioner must be replaced every 2 years.
- Brake Caliper Lubrication: Cheap, easy, can be done by almost anyone. This needs to be done once a year around the start of winter.
Factor 4: Fuel Costs
This is the area in which Tesla vehicle owners have real reasons to celebrate. Considering the extra money that you paid to get an electric vehicle, you will probably be relieved to know that you will be spending a lot less on fuel. You can go to Tesla’s website and use their online fuel cost calculator to get a more specific idea, but the savings will often be as high as 75-80%. That is to say; you will spend about 75-80% less on fuel costs.
As you can see, electricity is generally a lot cheaper than gas. There are several reasons for this fact. First, electricity is a renewable resource. Most electrical generators work by using a coil of copper wire and a powerful magnet. The magnet is able to pull and manipulate the electrons that are present in the copper, and that movement is what creates an electrical charge. When you rig your copper and magnets into two spinning and interlocked wheels, you can generate massive amounts of electricity. Thanks to new renewable energy technologies, you can now generate a lot more power from the sun, the wind, and the water than ever before.
Petroleum, on the other hand, is a completely non-renewable resource. In fact, it might be said to be one of the least renewable resources on the planet. The oil from which gasoline is made comes from organic remains that broke down over millions of years to become an energetic goop that we today know as crude oil. Thus, you are burning dinosaur bones every time you switch on your ignition. That’s a funny thought, but it is literally the case.
So, now that you understand this, you understand why electricity is so much cheaper than gas. Electricity can be produced in all sorts of ways and will never run out. Petroleum can only be produced by millions of years of heat and pressure, and the long-term decay of organic material. Obviously, one of these things is a lot easier and cheaper than the other.
When it comes to the total cost of ownership Tesla Model 3 stands out in a positive way. It is the cheapest option available from Tesla, making it arguably the most important vehicle in their lineup. We have attempted to address the most important issues here, but you may have noticed that we spend a lot of time on the insurance costs. We did that because it represents the only major TCO (total cost of ownership) downside of these cars.
However, there are some solutions to this insurance issue, and you can bet that more solutions are on the way. It’s good to know that Tesla has gotten into the insurance business, as this is probably the simplest and most practical way to resolve the problem. And so, our conclusion is this: The initial cost of a Tesla Model 3 is pretty high but still lower than the average price of a new gas-powered vehicle. Maintenance costs are very low, and fuel costs are even lower. Thus, this is a very affordable option that deserves a careful look. If you have enjoyed this article and would like to learn more, please fill out the contact form below.