What is the Real Cost of Owning a Tesla?

In some ways, this question is more complex than asking how much it costs to own any car. There are the obvious costs of the purchase price and maintenance, but what about the cost of insuring the vehicle or the incurred cost of a supply chain delay in vehicle parts? How do those factors factor into the true costs of owning a Tesla? In some cases, it might be beneficial to own a Tesla, while in other cases, owning another car may prove to be more fiscally responsible. 

The global consensus appears to be that electric vehicles (EVs) are the future. So, it’s important that current and future Tesla owners are aware of the costs of owning a Tesla. 

The purchase price of an electric vehicle is usually higher than the average gas-powered vehicle due to the high costs of materials and labor required for making such vehicles. In Tesla's case, they also have the additional expense that goes into the research and development of new products. While the company is still hard at work developing cost-effective models, there’s some uncertainty as to what the future will bring regarding prices.

In this article, we’ll explore the industry-related factors and trends that are contributing to the real costs of owning a Tesla. 

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Understanding the Real Costs of Owning a Tesla

To understand the costs of owning a Tesla, you need to analyze all of the variables that go into maintaining a vehicle over the long term. What are the costs associated with maintaining a vehicle? What’s the energy consumption of each model? What are the insurance rates for each year, make, and model across regions of America? A new customer buying a Tesla may be surprised to see how these variables impact cost over time.

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The Real Cost of Ownership

As you know, long-term car ownership involves a lot more than paying the bills and filling that tank. The same is true of EVs; there are numerous associated costs that you’ll incur as a Tesla driver. In a previous article, What is the Total Cost of Owning a Tesla? we discussed the following list of variables that impact the long-term cost of Tesla vehicle ownership. Here are the main factors:

Vehicle Cost: Tesla is both an EV company and a luxury vehicle company, and this is represented in the price tag. Currently, the auto giant is working on more accessible vehicle models, but there has yet to be a mass rollout. 

Cost of Charging While Out: The refueling cost of electric vehicles is where owners are purported to make up ground against traditional automobiles. The cost of charging a vehicle at a Supercharging station, for instance, is around $0.13-0.26 per kWh.

Cost of Charging While Home: Every Tesla comes with the ability to charge at home, either through the installation of a home charging system or using a mobile adaptor. Depending on your state, electrical system, and Tesla model, achieving a full charge will cost around $7 and $20 dollars.

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Maintenance Costs: When it comes to maintenance costs, it’s generally accepted that Tesla’s are more expensive. Because the technology and systems behind its performance are new, there’s a demand for the tools and skills to properly maintain the vehicle, and this can increase the price of real ownership. 

As you can see, it’s not straightforward to determine the real cost of owning a Tesla. Depending on your state energy prices, the vehicle itself, and your home and public energy setup, the day-to-day costs can change quite a bit. Additionally, there needs to be consideration about how parts replacement, supply chain issues, and changes to energy infrastructure could change the long-term cost of ownership for Tesla owners.

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Projecting the Long-Term Costs of Owning a Tesla 

While there are often assumptions of stability built into cost projections, the current automotive landscape, particularly the EV segment, is not quite at that point. Raw material prices, supply chain disruptions, and changes in energy production costs are all highly volatile due to various reasons, such as the war in Ukraine, governmental regulations, and more.

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Variables Impacting Tesla Maintenance Cost and Fuel Cost

One of the most disruptive factors to the solid estimation of the long-term cost of owning a Tesla is the uncertainty of future maintenance costs. One of the major reasons that electric vehicles start at a higher price is because they use components that are nascent to the automotive industry. This requires investment in R&D, new manufacturing infrastructure, and new supply chain connections—all of which trickle down into consumer cost.

Electricity Cost: The cost of electricity is constantly in flux. It’s impossible to predict what Tesla's electricity cost will be in 5 years, let alone 10 or 20.

The debate rages on about which form of energy (coal, oil, wind, solar) provides the least expensive source of electricity for vehicle charging. One thing is clear, though, the country is in for wholesale change over the coming decades as the US tries to phase out its reliance on petroleum (35%), natural gas (34%), and coal (10%). Renewables made up about 19.8% of energy consumption in 2020, but with increasing government and private sector commitment, cheaper energy prices may just be over the horizon.

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Component Production Cost: Batteries get a lot of attention when it comes to electric vehicle costs, and rightly so. They’re literally the engine of Teslas and other EVs, fueling the powertrain and all accessory features. The price of EV batteries is currently determined by the price of their raw materials and production. Naturally, supply chain issues also factor into the equation, particularly for companies that get their batteries from abroad. Luckily, Tesla is offsetting some of its outsourced production by creating sustainable Gigafactories within the United States. 

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Final Notes

Owning a Tesla might have more upfront costs than purchasing a gasoline-powered vehicle, but Tesla owners will save money in the long run. Electricity is typically cheaper than gasoline, and not using gas allows Tesla owners to achieve better fuel economy. Additionally, the maintenance costs on a Tesla are significantly less than a gasoline-powered car, given that the electric motor is significantly simpler and requires far less maintenance. It all depends on what’s most important to the individual owner. One thing is for certain: as the infrastructure for electric vehicles grows, there will be more incentive to purchase an electric vehicle. As a result, we can hope to see the prices of these vehicles go down.

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