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My Tesla Model S is almost free.

My Lexus RX300 doesn’t get great mileage, it’s a pretty average 16 mpg according to my car’s mileage calculator. But I don’t know if that’s accurate. According to a study by Edmunds, they find that cars overestimate mileage commonly. I know that I’m filling up my tank about every 5 to 6 days, at about $60 per tank fill. That’s $300 per month, and $3600 per year!

If I were to calculate this for 10 years, that would be $36,000 in gasoline! However, gas won’t always be around $4.00 per gallon. In fact, from what I read, analysts are predicting that gas will be double in price from what it is now by 2020. Ouch! That means that by 2020, I’ll be paying $8.00 per gallon (it may be even more by 2023 - 10 years from the time I get my Tesla Model S in 2013).

So I did the math. If I pay the median of the price between $4.00 and $8.00, that is $6.00, then I’m really paying 1.5 times more than what I’m paying now. 1.5 times $36,000 is $54,000. Wait, doesn’t the Tesla Model S cost $57,400 plus an estimated $1950 destination fee? Don’t I get a Federal rebate of $7500 that reduces it to $49,900? Won’t I have to pay sales tax on it at 9.75% for the amount of $5,597? Per the DMV in California’s calculator, I’ll be paying $454 in registration fees. My car too, will be worth something 10 years from now when I sell it. So this number will actually be lower. Let’s lowball it and guess that its worth only 10% of what it cost me, so that’s $5740.

From my calculations, it costs $3.00 to recharge a Tesla 160 mile battery. If I’m getting 16 miles per gallon at $4.00 per gallon and spending $3600/year in gasoline, then I’m traveling about 10,800 miles per year. That works out to $203 in electricity per year in the Tesla. In speculating that electricity costs too will double in 10 years, then the average of that would be 1.5 x $203 x 10 years = $3045 in fuel (electricity).

So let’s add that up:

Cost of the Tesla S + Destination Fee + Sales tax - Federal Credit + Tesla S Resale value - Fuel costs (electricity)

$57,400 + $1950 + $5597 +$454 - $7500 - $5740 + 3045 = $55,206

But if you compare the estimated/forecasted $54,000 that I would spend in 10 years for gas, compared to $55,206 that the Tesla S and all expenses will cost, there’s only a difference of $1206, making the Tesla Model S almost free!

This, however, doesn’t include what I may pay for insurance on a Tesla Model S vs a less expensive car, nor what I save in maintenance costs since an electric engine doesn’t have the same maintenance requirements as a gasoline-powered engine. But wow, what a saving! No wonder the Tesla Model S is sold out for 2012 and is already selling cars for delivery in 2013!

Friday, November 11, 2011

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