Tesla was one of the first companies to come out with a reliable and quality all-electric car. From the day they announced their first car, people have been very interested in their products. That interest has even grown as the vehicles have proved to be of high quality and new versions have been released. Despite that, many people are still hesitant to invest in a Tesla. Why is that?
Tesla has a high upfront cost of a Model 3 Tesla is $39,000 for a base package. The Model S starts at a whopping $76,000. Their all-electric SUV has a base price point of $90,000. It should be noted that these are the base prices of buying a stock Tesla from a dealership. To get a custom Tesla, expect to pay a fair amount more. While the Model 3 may seem closer to being realistically affordable. Many people are still concerned if the fuel savings will outweigh the cost of buying the car.
Let’s take a look at how various factors mitigate the cost of a Tesla.
Electric Vehicle Tax Incentive
Currently, the federal government offers a tax incentive of $1,875 for those who buy a new electric vehicle. All models of Tesla are available for this incentive. It is important to note that it is only valid at this time until December 31, 2019. After that, there will likely be a change.
Some states also offer tax incentives to buyers of electric vehicles. In most cases, this comes in the form of a sales tax break. This can give you even further savings, You will have to look up your local incentives to know how big of savings.
Some of the other benefits of owning a Tesla can help offset the initial cost. These benefits vary on a state by state case. Here are a few of them:
- In Hawaii, you get carpool lane access and reduced fees for charging electric vehicles.
- Illinois does not require electric cars to get emissions testing and offers reduced registration fees.
- Those who live in Florida may also be able to get funding assistance for the installation of their charging station.
Numerous states also offer rebates for those who buy electric cars and electric utility discounts for those who are charging their electric vehicles at home.
Charging your car at home has an average cost of about $601 a year if you only drive 15,000 miles. That price will go up if you drive more often and thus need to charge your car more often. To further help offset this cost, Tesla offers free charging for around 1,000 miles a year at their Supercharger stations.
Still, $601 a year is far less than the yearly cost for fueling a Subaru Outback for the same distance. With a Subaru Outback, you will spend about $1,420 a year according to Fueleconomy.gov. You will save about $800 a year on gas alone.
Not all insurance companies offer special rates for owners of electric cars. You will find that there are more than a few out there that do. As these rates vary based on your driving history, state, and the model of Tesla that you buy, it is hard to pick out your exact savings.
After all of this, is there a cost benefit to driving a Tesla? It would take 48 years of driving a Tesla to offset the cost of a base Model S Tesla in just fuel alone. However, when you apply the various tax benefits and registration benefits, you can start to see the value of owning a Tesla. You also need to factor in the resale value of a Tesla being much higher than that of other cars.