The total cost of ownership is one of the most interesting factors when considering an electric vehicle in comparison to an internal combustion engine counterpart.
Today, we will take a look at Tesla's 2021 Impact Report, which highlights the total cost of ownership (TCO) of the entry-level 2021 Tesla Model 3 RWD in comparison to some other models.
In general, the single biggest item in the TCO analysis is the initial expense related to the purchase of the vehicle. Usually, the price of an electric car is higher than a conventional model. On the other hand, the maintenance and energy costs are potentially lower for electric cars.
Tesla notes also the importance of the residual value, which in the case of used Tesla vehicles "has remained exceptionally strong since our initial launch." The analysis includes things like taxes, fees, incentives, financing, and insurance.
2021 Tesla Model 3 RWD - TCO
According to Tesla, the total cost of ownership of a 2021 Tesla Model 3 RWD, over five years and 60,000 miles (96,500 km), is about $0.63/mile ($37,800 total).
The manufacturer underlines that the ownership cost of a Tesla Model 3 is closer to a Toyota Camry (America's best-selling sedan) than a BMW 3 Series (shown as a more appropriate competitor in terms of performance and "premium" features).
"Tesla Model 3 has a base price similar to BMW 3 Series, but the total cost of ownership per mile is closer to America’s best-selling sedan, the Toyota Camry*"
According to the chart, in 2021, the Toyota Camry had a total cost of ownership of about $0.52/mile ($31,200 total). The BMW 3 Series appears to be above $0.8/mile.
It means that the Tesla Model 3 RWD is 21% or $6,600 more expensive to own than the Toyota Camry, over 5 years and 60,000 miles. The initial expense is even higher than that but partially offset by lower running costs.
2021 Tesla Model 3 RWD: roughly $0.63 per mile
2021 TCO vs 2020 TCO
An interesting thing is also the comparison of the TCO of the 2021 Tesla Model 3 RWD versus the 2020 Tesla Model 3 Standard Range Plus (SR+).
In the 2020 Impact Report, Tesla revealed that the 2020 Tesla Model 3 SR+ had TCO of $0.55/mile ($33,000 total) for the same 5-year period and 60,000 miles. It means that the 2021 TCO is almost 15% or $0.08/mile ($4,800 total) higher than the 2020 TCO.
At the time, the Toyota Camry was estimated at $0.50/mile ($30,000 total). So the increase for Toyota was 4% or $0.02/mile ($1,200 total).
In other words, the gap between the affordability of the entry-level Tesla Model 3 and a Toyota Camry widened.
2020 Tesla Model 3 SR+: roughly $0.55 per mile
We guess that the main reason behind the higher TCO for Tesla are price increases. At the end of 2020, the Tesla Model 3 SR+ was priced at $36,490 (+DST), and in early 2021 it was still below $40,000 (+DST), but as of April 2022, the Tesla Model 3 RWD started at $46,990 (+DST).
The price increase is partially offset in the TCO by the increasing price of used Tesla cars (low depreciation/high residual value), but considering the trend in prices, the TCO will probably continue to increase in 2022.
The final note. The Tesla Model 3 RWD is the entry-level version, equipped with LFP batteries. Higher range versions or other Tesla models are more expensive, thus their TCO is expected to be even higher. It means that those who consider buying a Tesla should treat the $0.63/mile value ($37,800 total over five years and 60,000 miles) as the base case scenario.