Is a Model 3 really cheaper?: A simplified analysis from an owner

[SammichLover]

(and what this person did!)

"Press X to doubt."

P.S. The fuel difference as well seems....well, dubious. He's talking less than $20 difference on 1000+ miles between electricity (LA residential is about 18c/kWh) and a 30mph (assuming it's all clear, highway sailing) car at CA gasoline prices. Unless he's not counting that at all, just left it out from the start? And should have claimed $200 difference? F...O...S And I'm getting the sense you are, too.

 

[FoverM]

This seems like such an apples and oranges comparison. You're comparing two cars that are in completely different classes. No one should be cross shopping a Tesla and a Subaru. The Model 3 is more in line with the BWM 3 series, Mercedes C class or the Lexus ES.

Exactly. It's crazy to compare costs on vehicles with such a large price and physical difference. You don't have to break out the green eyeshades to see that.

 

[Bet TSLA]

I do see your point, but I struggle with it. It's not certain that Tesla won't charge for feature updates (see Enhanced Summon going away in favour of Full Self Driving, for example). Other aspects of the car's software certainly change (creep mode, Joe mode, Tesla arcade, streaming), but it's nothing physical. Insurance agencies are sure having a difficult time valuing software-only features (many don't count your purchase of FSD into the value of the car, for example). So far there's no evidence that these changes play out into actual increases in value, and I somewhat doubt there will unless there's a payment made to enable the features. A large shift in vehicle valuation methods is required before this has any impact IMO, especially since Tesla is one of very few doing such updates.

Maybe I was unclear. The car becomes more valuable to you over time. And it depreciates more slowly because it isn't dated. My 2017 Model 3 has Dog Mode, it has vastly improved auto-pilot (which keeps getting better), its controls are hugely improved over when I got it, it is customized to its users much more precisely, it is quieter and rides more smoothly, it has more range and power, and it has extensive entertainment features I never bought nor expected. Plus it will keep getting better. And none of this cost anything additional.

There's even some reasonable chance that it will eventually be fully self-driving. If that happens, vehicles that aren't will drop drastically in resale value, while the value of the Tesla goes up. Similarly, as gasoline becomes more expensive and difficult to obtain the resale value of all gas cars will go down fairly rapidly. If you're going to be considering any time frame over five years, you have to consider those possibilities. Teslas are the only cars in existence that are future proof.

 

[camalaio]

Exactly. It's crazy to compare costs on vehicles with such a large price and physical difference. You don't have to break out the green eyeshades to see that.

Hahaha, for whatever reason your wording made me see the absurdity of the whole thing on the surface finally.

This is however a very frequently brought-up topic given that there are savings by using electricity instead of gas, for the average person. I stand by my statement that a large portion of the cost difference is not the class of luxury the vehicles are in, but the premium currently attached to electric vehicles in general. That summarises the origin of the topic.

I think (and know, for some people) that they're willing to pay this price difference simply to get into an EV that works for their lifestyle. "Luxury" EVs (Model S, Jaguar I-PACE, Audi e-tron) are all significantly more expensive than both the Model 3 and their somewhat equivalent gas-powered siblings. It's an EV premium, not a luxury premium.

Maybe I was unclear. The car becomes more valuable to you over time. And it depreciates more slowly because it isn't dated. My 2017 Model 3 has Dog Mode, it has vastly improved auto-pilot (which keeps getting better), its controls are hugely improved over when I got it, it is customized to its users much more precisely, it is quieter and rides more smoothly, it has more range and power, and it has extensive entertainment features I never bought nor expected. Plus it will keep getting better. And none of this cost anything additional.

There's even some reasonable chance that it will eventually be fully self-driving. If that happens, vehicles that aren't will drop drastically in resale value, while the value of the Tesla goes up. Similarly, as gasoline becomes more expensive and difficult to obtain the resale value of all gas cars will go down fairly rapidly. If you're going to be considering any time frame over five years, you have to consider those possibilities. Teslas are the only cars in existence that are future proof.

Ah, gotcha. To be fair the points about customisation, quietness, ride quality, etc. are fairly static from the time of purchase (in fact, some are about to get noisier with the low-speed sound emissions as required in some areas). I do agree the change in gas pricing will play an interesting part in the future, however demand will drop as well... so will this actually keep gas prices lower? We're on the cusp of some rather complicated changes, or perhaps lack thereof.

"Press X to doubt."

P.S. The fuel difference as well seems....well, dubious. He's talking less than $20 difference on 1000+ miles between electricity (LA residential is about 18c/kWh) and a 30mph (assuming it's all clear, highway sailing) car at CA gasoline prices. Unless he's not counting that at all, just left it out from the start? And should have claimed $200 difference? F...O...S And I'm getting the sense you are, too.

No no, the fuel difference aligns fairly close to my analysis. Let's break it down. Price of gas in Cali is apparently nearly exact to my cost (quick Google search). 15,000mi/year is a bit over half of my yearly statement, and 0.18/kWh USD is roughly 70% higher electricity costs (follow the currency conversions too).

So take my gas cost as-is and apply the distance ratio (0.6035), that's $561.01 (CAD). Add the 70% higher cost, that's $953.72 for electricity, CAD, per year.

For gas, it again gets similar mileage on the highway to my Crosstour (this is rather funny to me, 3 vehicles with very similar highway mileage). So given that the gas price is effectively the same, just multiply by the distance ratio and we get 2294.27 CAD.

The difference, per year, is $1340.55 (CAD). Per month, that's $111.71 (CAD). In USD, that's $84.24.

So roughly $84 (USD) saved per month in fueling costs for the Tesla compared to a C300 in California, and he claimed he calculated $111.17 (USD) savings, actually giving extra favor to the Tesla. This may be due to premium fuel and not good ol' regular, in which case these numbers seem incredibly accurate compared to my experience and published facts. There is no fecal matter here, only numbers roughly in line with real-world resource costs and EV efficiencies.

EDIT: I should point out that this is a very important data point. The less you drive an EV, the slower you will be able to "break even" compared to a gas vehicle you would have otherwise purchased, and the less you will save in fuel costs per month. The example I gave in the original post was a uncommonly large yearly usage of 40,000 km/year or roughly 25,000 miles/year.

 

[camalaio]

Right, CA will cost about $170 for the fuel and electricity for the Model 3 will be about 1/3 to 1/4 that (it really is that strong a correlation across most of NA). 2/3 of $170 is about $110.

Which, as I said, he completely left out of that first post. Right?

They initially said "When I figured in all costs, it costs about $100 [USD] a month more for me to drive the Mercedes". So saying the Tesla was $100 cheaper per month.

Later, they elaborated that if considering only fuelling costs, it was a $111.17 USD difference. However, factoring in the difference in lease cost ($20 USD less per month for the Model 3, so we're at $131.17 for a running difference) and other related costs (insurance, charger, rebates) it came out to a final difference of $93.33 per month, with the Tesla being the cheaper option. Charger was likely somewhere between $600-$1500 depending on model and installation costs, so about $28/month against the running total if we take the middle of the road, bringing it to $103.17. I suspect the insurance was somehow cheaper on the Tesla to account for the last $10, but this makes sense given the value of the car is about 20% less.

$93.33 is indeed "about $100". They did not leave it out of the post, and this in fact agrees with my entirely evidence-based or otherwise trusted/verifiable numbers that can be found in the original posting when compensated for resource prices in California.

EDIT: I got a number backwards, corrected.
DOUBLE EDIT: I did it again, post is now consistent.

 

[Dan203]

I get where you're coming from. Even the Nissan Leaf (with the highest range) isn't in the same price category as a Subaru at the moment. I sort of alluded to it earlier, but I don't consider the interior of sufficient... durability? to be considered luxury. The interior of a 3 series, C class are far beyond the Model 3. I'm assuming it's the same case for the Lexus you mentioned.

I've owned a couple of BMWs and the interiors aren’t that luxurious. The Tesla isn’t quite as nice, but it's nicer than a Subaru. (I've also owned one of those) With Tesla more of the price goes to the technology then the luxury, with the BMW they're using 100 year old technology so they can afford to put a bit more toward the interior. If you want both you have to get an S, which is another $30k.

 

[camalaio]

I've owned a couple of BMWs and the interiors aren’t that luxurious. The Tesla isn’t quite as nice, but it's nicer than a Subaru. (I've also owned one of those) With Tesla more of the price goes to the technology then the luxury, with the BMW they're using 100 year old technology so they can afford to put a bit more toward the interior. If you want both you have to get an S, which is another $30k.

Oh man, let's be clear. Older, even somewhat recent Subaru interiors are not good. We can definitely agree on that. I did not mind 2019's offerings though. A 3 or 5 series BMW isn't super luxury by any means, but it ain't no economy car and is fairly refined. But your ending statement is exactly my point, the more classic luxury interior comes with the Model S, not the Model 3.

 

[SammichLover]

Later, they elaborated that if considering only fuelling costs, it was a $111.17 USD difference.

No, it's 93 + 111 by his numbers. More than $200.

Or he's juicing the upfront costs like crazy. Because a charging station doesn't disappear in a year or three. Or who knows what, because he's definitely not being transparent about these numbers, which you praised transparency on. Which starts putting you in the FOS category (well, you were in towards that already, I've driven that section of highway multiple times you mentioned, I actually have family in that area these days, along with other stuff you've implied defeat on but don't have the character to own up on).

He's a Bad Math nonsense poster.

P.S. " I suspect the insurance was somehow cheaper on the Tesla". "Somehow" as in "very likely". LOL

 

[camalaio]

No, it's 93 + 111 by his numbers. More than $200.

Or he's juicing the upfront costs like crazy. Because a charging station doesn't disappear in a year or three. And he's definitely not being transparent about these number, which you praised him on. Which starts putting you in the FOS category (well, you were in towards that already, I've driven that section of highway multiple times you mentioned, I actually have family in that area these days, along with other stuff you've implied defeat on but don't have the character to own up on).

He's a Bad Math nonsense poster.

Again, no.

> I then added to this equation cost of installing a charger, local rebates, insurance, and fuel. The difference was $93.33 per month.
> However, the difference in fuel cost was $111.17 per month.

Notice the $93.33 includes charger, rebate, insurance and fuel. So it's not 93 + 111. It's just 93. $111 is part of what got to the final difference, as is the rest of what I outlined. And keep in mind I fairly independently arrived at a similar number to their claim when only considering their likely accurate lease costs and California resource costs. If you think the numbers in my original post are "FOS", please point them out as it's not beneficial to anyone if my numbers are significantly incorrect. It is not my intent to share incorrect info on the costs of owning a Model 3.

Your point about the charger not disappearing at the end of the lease is fair. We don't know their situation though, so perhaps it effectively does (e.g. charger installation in a rental unit). Additionally, they're not necessarily using it beyond the 3-year lease if their next vehicle is not an EV (or not compatible with the charger in some way without further costs, say if they got a Tesla wall charger and got a VW EV down the road and needed a Tesla->J1772 adapter).

Aside from corrections to my numbers since they may be "FOS", I think it's best that I do not participate with your responses anymore. I'm not even sure what your goal is, given that this other poster pointed out that an SR+ lease is cheaper than a C300 lease when considering the total cost of the lease. The bewildering counter-statements certainly are not helping Tesla adoption because you are expecting people to claim that the costing is better than it is in reality, actually part of the very reason I made this post in the first place (not you specifically, but because it is misunderstood that EVs are not universal cost-savers, though that can certainly be the case depending on your options and decisions). Perhaps I'm being trolled and you're the anti-Telsa one with some odd reverse psychology approach? That can't be. Maybe I'm unclear or am missing some large savings/cost that hasn't been pointed out yet that you know of? Gah. The internet is hard and it often wins.

As for the rest of "FOS" that I am, if you're around the Okanagan, PM me and drive my Model 3 if you're up to it. Maybe there's an issue with my particular car on these roads. Maybe I'm absolutely clueless on where my vehicle is in relation to road lines (this isn't impossible -- it's not my opinion, but it's not impossible. It's also highly unlikely since I've been on the phone with my wife in a vehicle following the Model 3, so we can see from behind that it's wandering outside the lane around corners). It's like seeing colors -- we don't know if people perceive colours the same ways as others without being in their head. I don't know if my Model 3's AP behaves the same as others since it's the only one I've ever been in. I don't know what I'm not "owning up on" either.

EDIT: I think you edited in the insurance point. I should have elaborated that my local context is that insurance for a Model 3 is completely disproportionate to gas vehicles of similar cost now, as in more expensive. It used to actually be the other way around apparently, but that is not so anymore. So for it to be cheaper doesn't necessarily make sense given my context, but taking just the value of the cars it does indeed make sense.

 

[Ol'Blue]

Camalaio, just a quick note, not sure if any other B.C. residents chimed in, but in regards to the step 2 pricing. Did you factor into your calculations that you were only paying the higher .14c price?

Realistically if the car is what bumped you up into step 2, then most of your charging has still been at step 1 and 0.09c

It might be worth looking at your bill and seeing what % of the bill is step 2 then apply that % to your charging costs. It will always be a rough calculation, unfortunately.

Great write up by the way! Fun to read.

Just imagine if you were paying $1.50/L like people a bit closer to the city! You’d be payed off even sooner!

It was amazing earlier this year when we were close to $1.90, everyone I knew started talking about going electric. (Sadly I think a lot have postponed with the lower fuel costs again)

 

[Petrocelli]

Your comparison seems entirely reasonable (I'm not fact-checking you, seems in the right ballpark), leasing is not a case I considered (Tesla doesn't offer leasing on a Model 3 in Canada yet). With your amount of travel, using my resource numbers, difference in fuelling costs are very roughly $100 (in favor of the Tesla of course) so yeah that seems about right that the C300 costs you an extra $100/month given that the lease prices are very close and maintenance-included.

I looked back at my spreadsheet and realized I need to make a clarification.

I included in my cost the benefit of having a free lease return. That was a one time cost that affected only me. I also included the cost of installing a charger.

I was truly trying to figure out the costs to me, and my number of about $93.33 is pretty accurate.

But when you back out those two items. The difference rises to $160.72 (in favor of Tesla). So the cost of owning a Tesla over three years is 25.7% lower than the Mercedes.

So the answer to you original question is: definitely yes.

 

[Petrocelli]

Meh, no big deal. I completely understand the viewpoint and can even agree on a lot of points that a C300 is "more car". Heck, in many ways the Crosstrek is "more car" if you care about leather, driver assist features, etc. I actually really dislike the fake leather in the Model 3 and would prefer cloth or real leather options.

I was unclear. I meant you are comparing a $46,000 car to a $40,000 car.

 

[Petrocelli]

"Press X to doubt."

P.S. The fuel difference as well seems....well, dubious. He's talking less than $20 difference on 1000+ miles between electricity (LA residential is about 18c/kWh) and a 30mph (assuming it's all clear, highway sailing) car at CA gasoline prices. Unless he's not counting that at all, just left it out from the start? And should have claimed $200 difference? F...O...S And I'm getting the sense you are, too.

I used this calculator, which I believe is very accurate. It takes into account thing like percentage of freeway driving. I think my electricity cost went up because I drove a lot on freeways at high speeds.

I assumed a cost per gallon of gasoline as either $3.75 or $4.00. (I don't remember which.)

The calculator gave me $6,369 for the Mercedes, and $2,367 for the Tesla over 3 years.

 

[RScottyL]

So, what I am assuming will happen.......

Elon is currently trying to bring the cost of batteries down so he can bring the costs of all of the vehicles down. Especially now that he bought out/merged with Maxwell Technologies!

Hopefully what this will mean is that future battery pack replacements will be cheaper than what they are now!

 

[alsetym]

My own penny by penny detailed analysis showed that depreciation is the single biggest cost of any new car for at least the first few years and completely changes the analysis. It actually helps the tesla a lot, since at the end of your analysis period you are left with an asset worth more than the subaru. For my usage case (45,000km per year in canada where gas is more expensive) over 7 years it made a LR RWD model 3 cheaper than a mid spec camry! Not to mention at my usage, if you follow the mfg recommendation the ICE maintenance gets very costly (though in my analysis I assumed I would do my own work after warranty, which I have always begrudgingly done). Parts for a timing belt/waterpump swap are not cheap! Engine air filters, synthetic oil, filters (which recently went way up in price)...

 

[Whitehawk]

Put away your Excel spreadsheets. It’s about the drive. The Crosstrek is a good car but it does not hold a candle to the performance and driving characteristics of an M3. This is an apples/oranges comparison. If you want the most transportation value for the dollar buy a 1 year old Camry. An AWD BMW 3 series with twin turbo six is somewhat comparable to an M3....but reliability is a problem after 4 or 5 years. I know this based on much personal experience.

 

[ecarfan]

The chemistry could not change significantly (Lithium ion to, say, Unobtainium superthing) without changing additional components and their Superchargers

Your definition of “significantly” differs from mine in this case.

Tesla battery development is a continuous process, and subtle changes in chemistry (which Tesla has implemented over the past several years) can have significant real-world consequences in terms of increased capacity and durability. And that has nothing to do with Tesla Superchargers.

I also take issue with your earlier statement:

12 years down the road, 480,000km (300,000 miles) will have been put on the vehicle. It's fair to assume at this point that one major component of the Crosstrek needed work. However, it is also fair to assume the battery of the Model 3 is in a degraded state at this point. Replacing the battery may be just as expensive as replacing the whole drivetrain of a gas-powered vehicle

It is not true that at 12 years/300.000km a Tesla battery has to be replaced. We have extensive Model S data showing that after the first year of 2-5% capacity loss, degradation continues at 1-2%/year (it does not increase). Using your example of 12 years at 300,000km a pack would have 75% to 85% capacity which would still be useful for many people.

And as others have pointed out, the history of storage battery technology over the past few decades shows that battery costs have dropped dramatically. Over the next decade, as EVs are built by the millions, battery cost will obviously continue to decline simply due to manufacturing scale and will also very likely decline as new technology is developed. So it is clear that EV battery pack replacement costs a decade from now will be much less than they currently are.

Do you think that a decade from now, the cost of an ICE drivetrain is going to be significantly less than it is now? Of course it won’t be. In fact, as EVs gradually take over the automotive market, and the ICE share of the market declines, ICE drivetrains are not going to be cheaper and they may very well become more costly.

Your analysis neglects all those points.

 

[alsetym]

Put away your Excel spreadsheets. It’s about the drive. The Crosstrek is a good car but it does not hold a candle to the performance and driving characteristics of an M3. This is an apples/oranges comparison. If you want the most transportation value for the dollar buy a 1 year old Camry. An AWD BMW 3 series with twin turbo six is somewhat comparable to an M3....but reliability is a problem after 4 or 5 years. I know this based on much personal experience.

No doubt about that, but...this is a thread about costing, and to do it properly you have to get pretty deep into spreadsheet mode. I'm an engineer...I like spreadsheets and do this type of analysis professionally on a regular basis so might as well apply that skill to the second largest purchase of my life. I did mine to 1. make sure I could afford the darn thing, 2. to show others they can as well.

 

[Fossil Fool]

The equation = There's price/cost on one side. Then there's perceived value: utility + pleasure (fun) + ego. I bought mine because of the fun side. As long as it fulfills the basic utility function I'm after the ego and pleasure value. I don't care if there's a tenth of a cent difference here or there. Just drive the darn thing and enjoy life!

 

[dmurphy]

Those that say Tesla’s are cheaper than other cars are liars or bad at math.

Apples and kumquats. Very difficult to compare vehicles head-to-head. They’re all so different - both in build and mission.

My last vehicle was about $12k more than the Model 3, just for the vehicle. Not including sales taxes (which don’t apply to the Tesla here) or the fed tax credit, etc.

So I’m very far “ahead” in the Model 3, but it’s because my last car was a top-shelf Cadillac XT5 SUV, and this is a mid-grade midsize sedan.

Apples and kumquats.