When it comes to Teslas, the image of a budget-conscious individual is not the first thing that comes to mind. However, as surprising as it may sound, the total cost of ownership of the new Model 3 is comparable to that of the cheapest car available in America. Paul Fosse, an insightful writer for Clean Technica, has done the math and compared the latest offering from the popular electric vehicle brand with the 2023 Mitsubishi Mirage, a gasoline-powered car known for its affordability.
At first glance, the 2023 Mitsubishi Mirage is listed at a new price of $16,245, while the Model 3 costs twice as much upfront. This significant price difference is usually the only factor that matters to car buyers when making their decision. However, Fosse takes a deeper look at the total cost of ownership (TCO) over a span of five years, which includes all expenses related to owning and operating a vehicle.
To estimate the TCO, Fosse uses a baseline measurement from Edmunds.com. However, he finds that their estimates for Tesla value depreciation, taxes, financing, and trade-in value are considerably inaccurate. Through his extensive research, Fosse discovers that Tesla cars, unlike high-end luxury or performance models, depreciate at a much slower rate of about 4% per year, which amounts to only $6,066 over five years.
Additionally, Fosse predicts that the $7,500 electric vehicle tax credit will still be available in five years, and purchasing a used electric vehicle still grants a $4,000 credit. This allows retailers to sell used Teslas at a higher price than before. By adjusting the taxes and financing costs, Fosse takes into account the new upfront price, which is nearly $16,500 less than the estimate provided by Edmunds.
Although the cost of insurance for a Tesla Model 3 is approximately $3,000 higher, owners can make up for it with reduced fuel costs (which vary depending on the location) and lower maintenance expenses, considering that Teslas have only one moving engine component. Furthermore, the tax credit plays a significant role in offsetting the overall costs.
Taking all these factors into account, Fosse calculates that despite its slower speed and fewer features, the Mitsubishi Mirage still has a five-year TCO of $31,349, which is only $1,000 less than a brand-new Model 3 Tesla. Additionally, over the course of five years, the Mirage emits 200 more grams of CO2 per mile, resulting in a substantial difference in carbon emissions, amounting to several metric tons.
In conclusion, although the upfront cost of a Tesla Model 3 is higher compared to the cheapest car in America, when considering the total cost of ownership over five years, it becomes evident that the Tesla is actually an economy-class car. With slower depreciation, potential tax credits, and reduced fuel and maintenance expenses, the Model 3 offers comparable affordability to the Mitsubishi Mirage.
Furthermore, the Tesla produces significantly fewer carbon emissions, making it a more environmentally friendly choice. So, while a Tesla may not scream “budgeter” at first glance, its long-term affordability and eco-consciousness make it a smart choice for cost-conscious consumers.
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