The True Cost of Owning a Tesla: A Comprehensive Analysis

The EV Perception Conundrum

According to a recent AutoList survey, one of the top priorities of customers is still the cost of charging their EVs over a long period. There persists this myth that charging an EV is too expensive or it takes too long. Although we believe that the second part of the statement is absolutely true, EVs have not yet reached a sweet spot for customers when it comes to charging time. The first part, however, is totally debatable and definitely worth a closer examination.

Considerations for the Cost Calculations

For the purposes of simplicity, we will focus on the most popular EV in the market, the Tesla Model 3, as our base car for the calculations. The math may vary considerably depending on the different makes and models. It is important to keep in mind that where you live will play a big role in determining the total charging cost of a Tesla, as your electric bill will be very different in Hawaii, where the cost of electricity is 30.55 cents per kilowatt hour, compared to Louisiana, where it is only 7.01 cents per kilowatt hour. Geography will influence not only your electric bill but also battery efficiency, as EV batteries generally tend to work better in warmer climates than extreme cold.

The charging cycle of your car will also make a difference, as repeatedly charging the battery degrades its life over time. You will have to get into a relatively regular cycle of charging for your Tesla, and there may be a bit of a learning curve when it comes to this, as you shouldn't overcharge your battery or always use Supercharging modes.

Finally, we will cap our charging calculations at an average of 20,000 miles per year for five years, for a total of 100,000 miles. We feel this is the best average use case scenario for a new Tesla owner.

The Real Charging Cost

The first cost you want to consider is the installation of a proper charging port in your garage. If your daily driving mileage is less than 50 miles, then you can probably get away with using the 110-watt outlet in your garage. However, our defined use case has an average weekly mileage of 380 miles, so most people will be required to install a NEMA 14-50 adapter. Your Tesla Model 3 will ship with a mobile connector along with a NEMA 14-50 adapter, and the average cost of such an installation can vary, but most people can get it done within $200.

This will enable your Tesla Model 3 to draw up to 32 amps at 240 volts, charging the batteries at a rate of 30 miles per hour. This will take approximately 10 hours to go from 0 to 100%, which is essentially the time you sleep. As a Tesla owner, you probably want to get into the habit of charging your car at home when you are asleep, as this kind of charging is probably the most cost-effective and hassle-free way. Additionally, nighttime electricity usage usually comes under off-cycle rates, so it will be a bit cheaper than daytime rates.

The US national average cost of electricity is 10.42 cents per kilowatt hour, but to be safe, let's round that off to 11 cents per kilowatt hour while charging at home.

Efficiency and Drain

Now we need to find our Model 3's energy efficiency. As per existing user data, the estimated combined highway and city energy consumption of the Tesla Model 3 is about 25 kilowatt hours per 100 miles. So, your Tesla Model 3 will use 25,000 kilowatt hours for 100,000 miles.

But before we multiply our electricity cost and the total energy consumption, we have to take a few other factors into consideration as well. The first is your wall-to-wheel efficiency, as you are reliant on a power grid to charge your car, there will be losses along the way due to power plant efficiency, transmission and conversion loss, thermal exchange, and so on. The wall-to-wheel efficiency for a Tesla Model 3 is around 90%, according to Tesla's own data.

The next thing to consider is phantom drain of the battery when the car is not plugged in. There will be a significant portion of time when your Model 3 would be parked for long durations, and during this period, there is a tendency for the battery to slowly drain out its power. This is called phantom drain, and on average, the Tesla Model 3 can lose up to 3% charge per day sitting in a parking lot not plugged in.

So, if we take these numbers into account, the energy efficiency of our Tesla Model 3 drops to around 87%, and hence the total energy consumption also increases to 29 kilowatt hours per 100 miles, or 29,000 kilowatt hours for 100,000 miles.

The Final Calculations

If we consider the ratio of home charging versus travel charging at 80/20, then we can say that 5,800 kilowatt hours out of 29,000 kilowatt hours came from the Tesla Supercharger network or other gas station charging points. According to Tesla, the average cost of these external sources is around 47 cents per kilowatt hour.

Therefore, to recap:

• $200 was our installation cost
• 80% of charging was done at home at a rate of 11 cents per kilowatt hour
• 20% outside at 47 cents per kilowatt hour

Doing the necessary calculations, we arrive at a figure of $5,478. Thus, we can round it off and say that the cost of owning and charging a Tesla Model 3 up to 100,000 miles is around $6,000.

Comparing to Gas-Powered Cars

To put this figure into context, a comparable gas-powered car like the BMW 3 Series will cost $14,285 to run 100,000 miles at the rate of 28 miles per gallon of premium gas, which averages $4 per gallon. That is an insane $8,000 in fuel savings over five years.

Another thing to add to this tally of the cost would be the year-to-year maintenance charges of your Tesla Model 3. On average, EVs cost about $900 a year to repair and maintain, whereas comparable gas-powered cars cost about $1,200 a year to maintain.

The Icing on the Cake: Rewards and Incentives

These days, both the government and the manufacturers are incentivizing EV ownership in various ways. The U.S. federal government offers a 30% tax credit on ChargePoint Home Flex EV charging stations, plus the installation costs. Tesla also offers free Supercharging miles as part of their referral program, which can reduce your travel charging costs even further.

But for us, the biggest benefit of owning a Tesla long-term is definitely the ability to invest those massive fuel savings into setting up a home solar power unit. With the rapid commercialization of home solar panels and power storage units, the economics are increasingly in favor of EV owners. In fact, one doesn't have to even wait five years or drive 100,000 miles before they can reap the rewards of a home solar unit. Solar power rental programs in various states across the United States are getting popular day by day, and Tesla themselves run out their solar power systems between $50 and $65 a month, along with a small setup fee. So, it makes sense to utilize those savings to reduce the cost of charging your Tesla even further, making the next five years of ownership even cheaper.

The Verdict: Tesla Wins the Head-to-Head

Yes, they may not be the cheapest cars, maybe not even the easiest cars to get used to, but the average cost of charging and owning one versus a gas-powered car just makes more sense in the long term. The savings make Tesla the outright winner in this head-to-head. Has our conclusion changed your outlook on buying a Tesla as your next car? Let us know in the comment section below!