Do you Save Money With a Tesla? (Incentives Breakdown)

Tesla. It’s not just a vehicle; it’s a proclamation, a way of life, a transformation. Let’s cut to the chase. You’re here because you’re pondering, ‘Will this sophisticated piece of technological innovation genuinely save me some of my hard-earned money?’ Well, it’s not a straightforward ‘yes’ or ‘no’.

Sure, there’s the upfront price tag – that’s a bit of a gulp moment. But then, think about the long game. We’re talking lower maintenance, no more gas station detours, and the sweet, sweet feeling of being kinder to our planet.

So, what’s the real deal when it comes to the impact on your bank account? Now, that’s the question worth its weight in gold, isn’t it? This article is your flashlight, ready to shine a light on the dollars and cents of Tesla ownership. So, buckle up, and let’s hit the road to discovery.

Can you Save Money with Tesla?

When contemplating the acquisition of a Tesla, a frequent query that emerges is whether possessing such an automobile can result in substantial savings. The response is complex, as it hinges on several factors including:

1. The Purchase Price

Tesla’s lineup is like a buffet of choices, each model offering unique features and falling into different price categories.

Tesla Model S

The Tesla Model S is one of Tesla’s premium electric four-door. The acquisition cost of a Model S can fluctuate based on the selected battery capacity, performance, and extra features. On average, the starting price of a Model S can span from $88,490 and can escalate to $108,490 for the high-performance Plaid variant.

Tesla Model 3

A black Tesla Model 3 parked on the side of the road.

The Tesla Model 3 is a more economical alternative compared to the Model S. Its starting price is generally lower, commencing at around $40,000 to $50,000, contingent on the battery capacity and features chosen. The Model 3 Standard Range Plus RWD is the least expensive Tesla you can buy, with a price of $45,190.

Tesla Model X

The Tesla Model X is an all-electric SUV with unique features like Falcon Wing doors. In the year 2023, Tesla introduces its much-anticipated Model X, offering an array of impressive features and options. The starting price for the “basic” version is set at $98,490, which includes the incredible combination of two electric motors and an efficient all-wheel-drive system.

For discerning enthusiasts who crave even more speed and luxury, Tesla presents the Plaid variant, which comes at a slightly higher price of $108,490

Tesla Model Y

The Tesla Model Y is a newer addition to Tesla’s range, providing a compact SUV style. The starting price of the Model Y can span from $47,490 to $54,490, contingent on the chosen configuration.

2. Fuel Cost

According to 2018 research by the University of Michigan’s Transportation Research Institute, the average expenditure to power an electric car was $485 annually, compared to $1,117 for a gasoline-driven vehicle.

The energy expenditure of different Tesla car models is as follows:

Tesla Model S

A white Tesla Model S parked in a parking lot.

The actual energy expenditure for the Tesla Model S can fluctuate depending on the specific model and battery setup. On average, charging a Model S with a Long Range battery, which offers a range of approximately 390-410 miles, might cost between $15 to $19 for a full charge. 

Tesla Model 3

For the Tesla Model 3, the actual fuel cost will also depend on the battery range and version chosen. Charging a Model 3 with a Long Range battery, providing an estimated range of around 350 – 360 miles, could cost between $10 to $14 for a complete charge. 

Moreover, the expense of setting up a home charging unit for Tesla, also referred to as a home charger or wall connector, can span from $300 to $4,500, contingent on elements such as the charger’s brand, power output, and any additional electrical tasks needed.

3. Maintenance Cost

In terms of upkeep expenses, electric automobiles like Tesla hold a clear edge over their petrol-driven equivalents. The average annual maintenance cost for a Tesla is around $300. This figure is significantly lower than the maintenance cost of other brands that make electric vehicle cars, which can average around $650 to $1,000 per year.

The reduced maintenance expenses of Tesla vehicles can be attributed to their simpler design, with fewer moving parts and no internal combustion engine. Additionally, the regenerative braking technology employed in Tesla cars reduces wear on the brake pads, further lowering maintenance costs.

4. Insurance Cost

When it comes to buying any vehicle, insurance is a key factor to keep in mind. The cost of insuring a Tesla can swing widely, depending on a variety of elements. For example, the average annual insurance premium for a Tesla Model 3, is $2,574, or about $215 per month, and for Tesla Model S is $3,673 per year. Additionally, the average price of car insurance for a Tesla spans from $1,543 to $4,318 annually, contingent on the model and the region.

Tesla vehicles generally have higher insurance rates for a few reasons. One primary factor is the higher cost associated with repairing and replacing unique components such as the electrical system and aluminum frame.

Additionally, electric vehicles, including Teslas, may have higher repair costs related to their unique powertrains and batteries. Lastly, the limited availability of repair shops specialized in handling electric vehicles can also contribute to higher insurance rates.

5. The tax credit

When it comes to owning a Tesla, one of the key factors that potential buyers often consider is the availability of tax credits. The tax credit is a financial incentive provided by the government to encourage the purchase of electric vehicles (EVs), including Tesla cars. It’s designed to promote environmental sustainability by making EVs more affordable.

How Does It Work with Tesla?

Eligibility To qualify for the tax credit, you must purchase a new Tesla vehicle. The amount of the credit varies based on the battery’s capacity and the manufacturer’s overall EV sales.

Amount The federal tax credit for Tesla vehicles can be up to $7,500. However, it’s essential to note that this amount has been phasing out for Tesla since they reached the 200,000 EV sales mark.

State Incentives – Some states offer additional incentives, which can further reduce the cost of your Tesla.

Tips and Notes!

The tax credit is non-refundable, meaning it can only reduce your tax liability to zero, and you won’t receive a refund for any excess credit.

The Verdict

While the initial cost of a Tesla is greater than that of a traditional car, possessing a Tesla can indeed result in substantial savings over time. From reduced fuel costs and maintenance expenses to potential tax incentives, the financial benefits are evident.