Despite Tesla marketing the Model 3 as a mainstream model compared to the rest of the Tesla lineup, it’s still a relatively expensive car. The cheapest 2022 Tesla Model 3 available is the Base trim, which has a starting price of $44,990, while the top-of-the-line Performance trim has a starting price of $58,990. However, over the long haul, a Model 3 is not as harsh on your bank account as it may seem, for it costs considerably less to own than an average gas car.
Is a Tesla Model 3 cheaper to own than a gas car?
One of the most surprising things for those unfamiliar with electric vehicles is that they typically are cheaper to own than an average gas car. This includes the Tesla Model 3. The Driven did a comparison study for three years of ownership costs between gas cars and a Tesla Model 3 Rear-Wheel Drive (RWD). While the study was for cars in Australia, the same principles apply to the United States and other countries.
In determining the ownership costs, The Driven included several expenses: depreciation, charging and fuel, service and maintenance, insurance, and registration and licensing.
Tesla Model 3 costs $10K less to own than a gas car over a three-year period
Based on the analysis, a Tesla Model 3 RWD costs around $10,000 ($14,000 in Australian dollars) less to own than an average gas car over a three-year period. So, if you bought a Tesla Model 3 and a friend bought a gas car like a Toyota Camry or Honda Accord — after three years have passed, you’d save around $10,000 compared to your friend.
In the study, the overall three-year ownership cost of a Model 3 is around $12,500, compared to $22,200 for a gas car. For the Model 3, specific costs include depreciation ($4,600), charging ($1,400), service and maintenance ($80), insurance ($4,600), and registration and licensing ($1,700).
In comparison, the specific three-year costs for an average gas car are depreciation ($11,400), fuel ($4,900), service and maintenance ($1,200), insurance ($2,800), and registration and licensing ($1,900).
Why do a Tesla Model 3 and other EVs cost less to own than gas cars?
The biggest contributor to the difference in ownership costs is depreciation. An average gas car depreciates in value considerably more than a Tesla Model 3. Over a three-year period, an average gas car depreciates $11,400, compared to $4,600 for the Model 3.
The next biggest ownership cost difference is charging and fuel. While the charging costs for a Model 3 are $1,400, the fuel costs for an average gas car are $4,900. The next largest ownership cost difference is service and maintenance. A Model 3 costs only $80 to service and maintain, compared to $1,200 for a gas car. The only type of ownership cost that is cheaper for an average gas car is insurance, with a cost of $2,800, compared to $4,600 for a Model 3.
Another thing to keep in mind is that the difference in ownership costs between a Tesla Model 3 and an average gas car increases every year. This is especially the case for depreciation and service and maintenance. Therefore, you’ll save even more money in ownership costs beyond the three-year period.