Electric vehicles are becoming increasingly popular as drivers look for alternatives to gasoline-powered cars. One of the most popular electric vehicle models is the Tesla Model 3. With impressive technology, styling, and performance, the Model 3 has seen strong demand since its launch in 2018. However, for many drivers, the upfront cost of an electric vehicle remains a barrier to adoption. Looking at total cost of ownership over the first several years can give potential buyers a better idea of the true costs associated with Model 3 ownership. In this analysis, we’ll look at total cost of ownership for a 2018 Tesla Model 3 after 5 years and 70,000 miles.
Upfront Purchase Cost
The first factor to consider is the upfront purchase price. In 2018, the base Model 3 started at $35,000 before any incentives or options. With destination fees, the total purchase price was closer to $37,000. However, very few Model 3s were sold at that base price. The median sales price for a 2018 Model 3 was around $50,000 according to data from Recurrent Auto [1]. At this median price, options like the upgraded battery, Autopilot, and premium interior features were typically included.
Depreciation Costs
One of the largest ownership costs for any vehicle is depreciation – the loss of value over time. Electric vehicles have tended to hold their value very well compared to gasoline vehicles. Data from Recurrent Auto [2] shows that a 2018 Model 3 can be expected to retain around 60% of its value after 5 years. With an average used sale price of around $30,000 for a 2018 Model 3 with 70,000 miles, that puts the depreciation cost at around $20,000 over the 5 years.
Maintenance and Repair Costs
One of the benefits of electric vehicles is the reduction in maintenance costs compared to gasoline vehicles. With far fewer moving parts and no oil changes needed, maintenance costs are minimal. Consumer Reports estimates maintenance costs for a Model 3 to be about $1200 over the first 5 years [3]. This includes periodic tire rotations, cabin air filter changes, and software updates. There are no major maintenance intervals required in the first several years of ownership. Repair costs are also reduced for EVs, with fewer mechanical issues. Warranty coverage from Tesla will cover most repair costs within the 5 year/50,000 mile limit. Outside of warranty repairs for issues like windshield replacement or tire/wheel damage, repair costs should be low. A reasonable estimate is $1000 over 5 years. Total maintenance and repair costs will be approximately $2200.
Battery Replacement Cost
Some consumers worry about battery replacement cost down the road for electric vehicles. However, Tesla batteries are designed to outlast the usable life of the vehicle. Most Model 3 batteries will not need replacement within the first 5 years, though some degradation is normal. For those that do need early replacement, Tesla has been replacing batteries under warranty. Outside of warranty, replacement cost is around $5000 according to third party providers [4]. For our analysis, we will assume no battery replacement is needed within the first 5 years.
Fuel/Charging Costs
One of the biggest savings for an EV over a gasoline vehicle comes from lower fuel costs. Based on average residential electricity rates, fueling a Model 3 costs around $550 per year [5]. At 70,000 miles over 5 years, total electricity costs will be about $2750. This compares very favorably to a gasoline vehicle that would cost over $8000 in fuel to drive the same distance. Some owners may also take advantage of free public charging stations when available to save even more. However, these savings will be offset by the inconvenience of charging time. We will assume home charging for most needs.
Insurance, Registration, Taxes
Insurance costs for a Model 3 will be comparable to similar gasoline vehicles, estimated at around $2000 per year for full coverage. Registration renewal and taxes will vary by state but will be similar, estimated at $500 per year. Total insurance and fees over 5 years will be about $15,000.
Summary of Costs Over 5 Years:
- Purchase Price: $50,000
- Depreciation: $20,000
- Maintenance & Repairs: $2,200
- Battery Replacement: $0
- Electricity: $2,750
- Insurance & Fees: $15,000
Total 5 Year Cost: $89,950
Effective Cost Per Mile = Total Cost / 70,000 miles = $1.28/mile
How does this compare to a typical gasoline vehicle? Taking a 2018 Toyota Camry for example [6]:
- Purchase Price: $25,000
- Depreciation: $15,000
- Maintenance & Repairs: $6,000
- Fuel: $8,400
- Insurance & Fees: $15,000
Total 5 Year Cost: $69,400
Effective Cost Per Mile = $0.99/mile
The Model 3 has a higher effective cost per mile driven at $1.28/mile versus $0.99/mile for the Camry. Over 70,000 miles, the higher upfront cost of the Model 3 does not completely offset the savings from lower electricity costs compared to gasoline. However, the ownership costs are fairly comparable, and the Model 3 holds value better. The technology and performance of the Model 3 helps justify the premium over a basic gasoline sedan like the Camry.
For buyers looking to minimize 5 year ownership costs, the Camry is $20,550 cheaper to own. But those willing to pay for the benefits of an EV like the Model 3 will find the total cost of ownership reasonable. And longer term ownership beyond 5 years will shift more in favor of the Model 3 as gas prices rise and battery replacements remain unlikely. In states with purchase incentives and lower electricity rates, the economics also improve for the Model 3. For the right buyer, the 2018 Tesla Model 3 represents an affordable way to get into EV ownership.
Conclusion
The total cost of ownership over 5 years and 70,000 miles for a 2018 Tesla Model 3 is approximately $90,000, or $1.28 per mile. This is only moderately higher than an average gasoline sedan like the Toyota Camry at $0.99 per mile over the same period. The Tesla retains its value better and has lower ongoing fuel and maintenance costs. But the upfront purchase price premium does not completely offset those savings within the first 5 years of ownership. For buyers who value the technology, performance, and environmental benefits of an EV like the Model 3, the total cost of ownership is reasonable. But it remains higher than basic gasoline sedan alternatives. Total ownership costs and preferences should be carefully considered when choosing between advanced EVs and budget-friendly gasoline vehicles.
What is the total cost of a Tesla?
Based on the analysis in the article, the total 5 year cost of ownership for a 2018 Tesla Model 3 with 70,000 miles is estimated to be $89,950. This factors in costs like:
- Purchase price: $50,000
- Depreciation: $20,000
- Maintenance & repairs: $2,200
- Electricity: $2,750
- Insurance & fees: $15,000
So the total cost over the first 5 years of ownership is about $90,000 for a 2018 Tesla Model 3 according to the projections made in the article. This comes out to around $1.28 per mile driven over those 5 years and 70,000 miles.
The upfront purchase price is the biggest component, with depreciation over the 5 years also being a major factor. But lower electricity costs compared to gasoline, as well as reduced maintenance requirements, help offset some of the higher initial purchase expense.
In summary, based on moderate assumptions, the total cost for 5 years of ownership of a 2018 Tesla Model 3 would be about $90,000. This is only moderately higher than a typical gasoline sedan which would cost around $70,000 for 5 years.
Read Also :- Electrified Future: Toyota’s Upcoming Electric Land Cruiser
What is Tesla cost of ownership?
The total cost of ownership for a Tesla vehicle can vary quite a bit depending on the specific model and year purchased. But based on the analysis in the sample article, here are some key points about Tesla ownership costs:
- Purchase Price – Teslas have relatively high upfront purchase prices compared to gas-powered cars, with base prices ranging from around $40,000 for the Model 3 up to over $100,000 for the Model X and S. Limited options and availability of the base Model 3 have meant most sales are for better equipped versions that end up around $50,000.
- Depreciation – Teslas tend to hold their value very well compared to other luxury/EV cars, with estimated depreciation of about 40% over the first 5 years. This helps offset some of the high initial price.
- Fuel/Charging Costs – Not having to buy gas and instead charging at home for very low electricity rates saves Tesla owners thousands over 5 years compared to gas cars. Approximately $550 per year for the Model 3.
- Maintenance/Repairs – Minimal maintenance like no oil changes brings estimated maintenance costs down to about $1200 for the first 5 years. Repair costs also projected to be low.
- Insurance/Taxes – On par with other luxury/performance vehicles, around $2000 per year.
For a 2018 Tesla Model 3, projected total cost of ownership for 5 years is about $90,000, or $1.28 per mile. This is only moderately higher than a basic gas sedan which would be around $70,000 total over 5 years.
So in summary, the higher upfront cost is offset somewhat by lower projected operating expenses. But total 5 year ownership costs are still projected to be around $20,000 more than an average gas sedan. The benefits in technology, performance and environmental friendliness account for the premium pricing.