Tesla Model S: Are They More Cost-Effective Than You Think?


Kenneth Kahn weekly crisscrosses the back roads and freeways of San Luis Obispo, Santa Barbara, and Ventura Counties in his job with the tribal government of the Santa Ynez Band of Chumash Indians. Add these trips to his personal excursions, and Kenneth can drive between 24,000 and 30,000 miles in a year, nearly double the amount of the average driver, according to the Department of Transportation.

Such heavy vehicle use — and gas —has consequences, as Kenneth realized. His mounting gas bill coupled with a growing realization of the repercussions of his CO2 emissions on the planet’s climate convinced him to look at purchasing an electric vehicle. Then, when an EV charging station was installed outside his office building, he took it as a sign.

Serious Mileage Means A Nissan LEAF Is Not Going To Be The Right Vehicle For Kenneth

Serious Mileage Means A Nissan LEAF Is Not Going To Be The Right Vehicle For Kenneth

Transitioning to an EV, however, wasn’t without its bumps.

Kenneth is a self-proclaimed “adventure guy.” He’s an avid cyclist and has always owned either a truck or SUV to haul his bike around. He knew that any new car was going to need to have the space for his bike, without making him break it down into myriad pieces.

And like most people considering EVs, he had doubts about their range. Some days he drove over 100 miles a day for his job, and he wanted to have confidence that the EV he purchased wasn’t going to leave him stranded on the side of Highway 101.

So, he set to work, researching and test driving the Prius Plug-in, the Toyota RAV4 EV, and the Chevy Volt. None of them fit what he wanted in terms of a fully electric car with a shorter charge time and a longer range. Then, Kenneth saw a brochure advertising the Tesla Model S that showed a fully-assembled bicycle stored in the rear cargo area and touting a range of 265 miles. He was intrigued, until he saw the car’s sticker price: approximately $100,000 for the performance model he was eyeing.

“I told my friends there was no way I was going to spend that much money on a car,” he remembers.

Still, to sate his curiosity, he decided to do a cost analysis, comparing the Tesla to his then-owned SUV. He discovered that calculating out to 100,000 miles (what he considered the average lifespan of a car) he would pay 3 cents per mile for electricity for the Tesla. At the time, he was paying 33 cents per mile for gasoline his SUV. The fuel savings alone penciled out to $30,000 over the life of the car.

He also determined that for the same mileage period he’d save $10,000 in maintenance fees with the Tesla, which requires no oil changes or smog checks, and has fewer moving parts to maintain. The car has no carburetor, fuel injection, gas tank, cooling system, or spark plugs. Plus, its use of regenerative braking means that its brake pads can last up to three to four times as long as a normal car’s.


“…there was no way I was going to spend that much money on a car”

Coupled with the $10,000 value of incentives available for EV purchases ($7,500 for the federal tax credit and $2,500 rebate for the state) Kenneth realized, to his amazement, that he’d just knocked the price of the luxury electric vehicle in half.

Kenneth had figured out the not-so-secret secret of the new Tesla models: pay for your fuel efficiency upfront and save more money in the long run. With his calculations in mind, he made the leap and purchased his white Tesla Model S Performance 85.

Now, even driving to work is an adventure. “The get-up-and-go on it is no comparison. It’s just an instant response. It’s certainly the fastest thing I’ve ever owned,” he says with an excited chuckle. And his sixteen-year-old son, who has been allowed to practice his driving in it, “thinks it’s the coolest thing in the world.”

He typically charges his Model S at the new charging station outside the Chumash tribal hall building and occasionally at the free Tesla supercharger stations in Buellton and Atascadero. These special stations are part of a larger network of fast charging stations that can add up to 170 miles to the car’s range in only 30 minutes. Although Kenneth rarely charges his EV at home, he noted that if he did fully charge it up from a dead battery, it would cost him about $6 on his electric bill to do so. His average individual gas bill with his SUV was around $80.

Kenneth has had his car for four months, and he already has close to 8,000 miles on it. So far, he says, he’s “well over 100% satisfied with car.” If you press him, however, he will confess a few minor shortcomings. For one, the aftermarket roof rack he installed (for transporting his mountain bike and snowboarding gear) is bulky enough that it reduces the car’s efficiency somewhat. But racks of any size can significantly affect the efficiency of most cars, and Kenneth points to the relative newness of the car to the market and asserts that the diversity of such accessories is bound to improve over time.

His only other concern?

“The car has a lot of power, and even though I’m not a crazy driver, I’m worried about the wear on the expensive performance tires.” After a gathered pause he adds, “But it’s worth it. It’s a whole different experience. I feel like a new car owner every day I wake up and look out the window and see it. Plus, there’s that feeling of satisfaction I get every time I drive by a gas station where I’m proud that I’ve lightened my footprint a bit.”

Our thanks to Emily DeMarco at the CEC (Community Environmental Council for this piece), as well as a hat tip to Michael Chiacos.

Categories: Tesla


Leave a Reply

45 Comments on "Tesla Model S: Are They More Cost-Effective Than You Think?"

newest oldest most voted

Great article. Hopefully he didn’t get the 21″ wheels. I too would trade performance for range. But man, is that performance fun!

dude the picture of him and has cars has the grey 21’s

In order to do the cost analysis you need to assume a value for the car when you are done with it……and resale values are frustratingly good for guys like me that look at used prices.

It really bothers me that so few people do this.

A 10-year old BMW is going to have WAY higher running costs than a 10-year old Tesla, and used car buyers are going to price that into their offers.

For the same reason, gas cars will be tossed into the scrapyard sooner, as repair/fuel eventually aren’t worth it. EVs are probably going to last 20+ years because they’re so cheap to operate.

10-year old Tesla needs a replacement battery, so the maintenance costs of aging electric vehicles are not trivial. But in 2024 batteries are probably affordable and they will provide faster supercharging, more kilowatts and more range than the original Tesla battery.

You’d think that the 08 Roadsters would be taking a hit on resale by now, but they aren’t.

A 10 yr old MS85 will still have more range and power than a new MS60, and the battery will have almost stopped degrading (mostly happens up front). And if swap stations ever come about, you’ll be able to rent a replacement new battery and then opt to keep it (by paying the difference).

Yesh, those 21″ tires have a much lower life expectancy.

“He’s an avid cyclist and has always owned either a truck or SUV to haul his bike around.”

It is amazing how the general mentality can negatively influence even people like Kenneth.

The idea that a huge vehicle is needed is so ingrained in America and is rarely questioned.

I have always been able to fix my racing bike or my mountain bike fully-assembled into the back of my four door hatch-back.

And if I took off the front wheels, I could fit my mountain bike, my wife’s mountain bike, our child trailer (with its quick-release wheels detached) in there, only folding down one rear seat, so that my son could still sit comfortably in the back.

My kids are ski racers and we do about 20,000 miles a year to take them to the hills and to the gym; in a Jetta wagon TDI. It is now well over 100,000 miles but still feels pretty new to me. I expect well over twice that in terms of life span. Doing the calculation for the Model S, what keeps this car from going 500,000 miles? Many thanks for any advise on this!

I have been curious as to how much people are paying for their insurance. Surely it would be 2-3x the price of insurance on his SUV… or enough of an increase that it should be factored into his calculations.

It makes sense that more EV driving nets more savings over ICE. But the same is (more?) true for the cheaper EV’s. The math on an i3, or a Leaf [w/frequent CHAdeMO charges], would probably have worked out as well or better. It is clear he just wanted one and he successfully justified it based on the amount of driving he does. And who can blame him?

I don’t know about CA insurance rates, but they’re absolutely ridiculous here in the Toronto area.

The liability portion is the main cost of insurance. The actual value of the car in the insurance premium is pretty much insignificant, even if it’s twice the cost of a ‘normal’ car.
The test results with Tesla being “safest car ever” (perhaps hyperbole, but that’s generally what I’ve seen reported) – means probably the same rates as a normal car, if not lower.

For example, on my (essentially worthless, no coverage beyond liability) car, I pay 3x more for liability than I would for collision/comprehensive coverage.
i.e. $1500 liability, $500 to top up to “full coverage”.
If the second portion was proportionate to vehicle value, then I’d expect $1500+$1000, or not a huge increase because of the vehicle value. Add in the safety factor above and it may very well be the same, perhaps $1000+$1000.

Though when I hear of states paying $500 or less a year for complete coverage (and complaining it’s high)… It’s all relative! 😉

I just went through an online insurance calculator and full coverage ($500 ded.) on a model S is actually $50 less than liability only on my car.

Ok, there’s something fishy with this calculator. Seems some companies would only insure my old car with full coverage, so my liability-only quotes were a little higher.

The Tesla S would be about $100 more than my current (worthless) beater to insure.
And about the same cost as a Volt (high safety ratings, about half the value) or even a Cruze LT.

Liability is the larger rating, at least where I am. Vehicle value has much less bearing.

My insurance rates for the Model S are lower than the Prius, not by much, though.

How is that even possible? If you total both cars they will be paying much more to replace the Tesla.

My Model S premium is actually $320/yr less than my wife’s Lexus GS350 (California).

Yeah, but that is because you have a crack-head major that break into or crash into your car. 😉

I wish it was only him!
More like the thousands of people who should NOT have licenses, and on top the scammers. (Search for ‘ragu dashcam’ as an example of one that got caught)

Maybe it has to do with the low standard of the us drivers license, but here in Germany, where it can cost $1500, 20 hours theory and 30 hours practical lessons, the liability insurance for my car is less than $350.

I would be under $400 for full coverage.

“carburetor”? Seriously?

Heh… that’s hopefully how people will see cars in the not-so-near future. Gas? Really?


I was walking through a parking lot recently, from my Leaf to a store, when a car we were passing was started by the driver. I looked at my wife and said, “Oh yeah — the sound of a dinosaur.”

Without hesitation or further elaboration she said, “Yep.”

We are getting to that mental tipping point in the general population, when the majority of people realize how much better EVs are than “real cars”. While I think that’s a gigantic win for people and the environment, I have to admit being a little nervous about the timing. If it’s a slow epiphany then the market can make a pretty orderly transition. If there’s some shock to the economy that makes gasoline much more expensive (insert your own scenario here) and/or batteries get much cheaper, then we could be in for some frustrating times: Dealer markups (like Honda dealers in the early 1980’s adding $3k to the price of a Civic) and long wait lists.

For someone that apparently thought the Model S was way too expensive at first, he apparently had no issues justifying the extra $13K for the Performance upgrade over the standard 85… 😛

Well, he didn’t go for the Plus package…

I was thinking the same thing…besides, performance tires are hellish expensive, and you’re lucky to get 20k miles on them.

I really can’t relate to the guy in this story in that it is after a $100,000 dollar car. If this story had been about a guy building a 35,000 Tesla model E then I would have felt for this guy. Another thing is if I wanted to buy a $35,000 dollar car I would have never been able to get financing on a $80,000 no mater how much gas it saves. You would have to have to drive a 50,000 or 70,000 miles a year in a car that gets 5 to 8 miles a gallon to make justifying a $100,000 to $80,000 electric car with free fuel then to buy a $30,000 gas car.

Get rid of the roof rack and add an aftermarket hitch and rack if he can’t find the extra 60 seconds to put the bike inside. He’s chosen the most inefficient way to carry his bike on a Tesla.

Yep, trailer hitch is the way to go for efficient hauling of bikes. Roof racks absolutely tank your efficiency on the freeway.

I don’t disagree, but if I have to choose roof rack vs. trailer hitch rack for a $5k road bike whose seat post alone is worth $150+ and an allen wrench away from theft, I’ll choose roof rack any day of the week. Same answer for pedals.

Granted INSIDE is the best/safest place for your bike and will get you the best mileage. But I’d rather spend the extra effort and mileage on putting my bike on the roof than the trailer hitch.

Understood that this is a personal decision; don’t take this as a criticism of your excellent points!

33 cents/mile? Even at $4 gas, we’re talking about an SUV that delivers 12mpg, carrying a bicycle.

I wonder if he misses the Range Rover.

It would not have occurred to me that those hitch racks would be more efficient, but now that I stop and think about it, I can believe it. Pretty much anything you place in that dead spot behind the vehicle will have less of an effect, or even improve, overall aerodynamics.

The photo shows Kenneth charging his Model S on an L2 charger (with adapter). That’s gotta be incredibly slow (proportionate to the battery size) like the L1 120V 960W charger that came with my i-MiEV.

The EVSE pictured is a Clipper Creek CS series unit. Those deliver between 30A and 80A to the car depending on model and circuit capacity.
Comparatively, 30A @ 208V = 6.24kW which would charge about 6.24% of the Model S per hour. Your 960W L1 would charge you MiEV at only 5.1% per hour. So, his worst case is better than yours on a percentage basis and way better on a miles/hr basis. I’m assuming 85% charging efficiency in both cases.

Well . . . most people don’t drive 24K to 30K miles a year. The average is about half that.

I know lots of people who drive more then that each year. My area has a lot of mega commuters in it who drive 60 to 80 miles one way.

Since when is 100,000 an average life of a car?!? Unless it’s a complete piece of crap, you can get 200,000 on vehicles today before the problems become prohibitive.

Cars usually go through a mid-life crisis somewhere around 80k-120k miles, when things like the A/C unit, water pump, fuel pump, sensors, etc., start to fail. But you replace those when needed, and it’s good for many, many more miles.

Yeah, very true. Of our gas cars:

– 99 dodge ram with 140K miles. Sure it’s costing me about $1000/year in repairs of stuff falling apart, but still runs like it’s new

– 08 Scion xB – 100K miles and still no mechanical problems.

I don’t get to the same numbers, at least for the US average of 12,000 miles per year driven. In the Prius at 50 MPG, I consume 240 gallon per year, or $960 in total spend. Service is $150 per 3 months, or $600 per year, not too different from the Tesla. Obviously the Tesla is a nicer car from an acceleration and infotainment perspective – duh! – but strictly from an economic standpoint, the premium for the electric car can’t be in the tens of thousands of dollars if it is going to make sense for a Prius comparison.

+1, on thoughts of Tesla and BEV depreciation, but at best I think what a model S gains in having a lower % depre, it loses in absolute $ depre, on 100k.

If this guy wanted to save money, then why did he starts his calculation by saying this: “comparing the Tesla to his then-owned SUV”

It is funny that most people would compare an new efficient vehicle to their old gas guzzler… IF he had converted his old SUV to a Prius, he would have saved similar amount of money per year while saving $75K upfront in cost of the purchase….

Sure, anyone would love to have a MOdel S. But if he was complaining about purchase price in the first place, then OBVIOUSLY HE CAN’T do basic math….

I am not quiet sure of this calculation for the Model S but it will certainly be very likely for the Model E. By the way, I think an Aluminum Model E will be arround for way more than 200000 miles, probably double that, so it will then indeed be very cost effective.

I was just telling a coworker that 4 business trips in my Leaf per month, with free charging at 1 end, pay for monthly home electric bill.

51 cent/mile work reimbursement
.51 * 200 miles = $102

Great story, but the comment about A Nissan Leaf not being the car for him was completely unnecessary and also false. My 2012 Nissan Leaf just turned 54,000 miles and two years old. Thats right, 27k miles a year. I tow my motorcycle and jet skies with it all the time. Oh yeah, my bicycle fits in the back just fine. Ill have a Tesla someday, but for now my Leaf works just fine for 27,000 miles a year of driving.
Ken in New Jersey. @nogasev

Green Car Reports has a great Article by David Noland on the efficiency of his newly converted 85 kwh (from 60) model S.

Its the only article I’ve seen that takes parasitic losses into account.