Comparing Total Cost of Ownership: Model S vs. an Acura TL
Updated September 6, 2016
How much more does a Model S cost than a comparable gasoline car? I ran the numbers. I went to the Acura web site and built a 2013 TL with the options I would have included had I purchased that car. I enjoyed my 2003 Acura TL, having driven it for ten years. The chart below includes all of the maintenance, insurance and license renewals. Keep in mind I am a stickler for details and kept track of every visit to the dealer and the itemized receipts. These numbers are dead on. I had to estimate the gas costs so it’s not perfect, but I believe I’m close. Here are the high level results of the analysis of a Model S and an Acura TL over ten years.
If you stay in the Tesla for ten years the numbers show that the Model S is less than 1% more costly to own than an Acura TL. That sounds pretty hard to believe, but I have double and even tripled checked the numbers and run my methodology past a couple of PhD’s. They did not find any significant flaws.
Some might argue that I should throw out the personal time investment because it’s not a hard cost. I argue it is the hardest of costs because it’s your life, not money. This calculation includes time you will spend waiting at the gas station to fuel your car, time you waste sitting in a dealership for oil changes, regular and unexpected maintenance. I used $50 per hour for one’s time, which is very low in my book. Time is one of our most important assets. We have a fixed amount of it. Once it’s gone you can never recapture it. My father used to say, “Kill time and you murder success.” Why not spend that extra week (yes, 7 days) with your family or vacationing, or working on a project you’re passionate about? Maybe even volunteering.
Here are a couple more things to consider. My 2003 Acura TL cost me $29,480, the 2013 TL is $43,310. Not the base price, but including my preferred options. So the Acura has gone up in price 47% in ten years. The Model S will likely become less expensive over time as battery technology improves. It is unlikely gas prices will go lower but highly likely they will rise. [Update: Gas prices have come down significantly since this post was written]
If we think about a potential “Moore’s Law of Batteries,” they will improve in range and performance and become cheaper to make. The 60kW battery I have costs roughly $10,000. It’s not officially published by Tesla, but insiders say this is a good number. After ten years of driving the TL, I will likely trade it in. If I were to buy another gas car I’d likely pay $65,000 for a comparable automobile. In eight years, when my Model S battery is no longer under warranty, I might visit a service center and have it replaced with a new battery pack. If the cost of Tesla batteries went down in cost 10% per year, that means I could replace my current battery size with a new one for $4,305. And if the range went up 10% each year I spend that money for a 125kW battery pack that could exceed 400 miles in range. I’d have new car, from an energy perspective. [Update: Tesla announced a 100kw battery in August 2016]
But why would I trade in the TL and not the Model S? One big advantage the Model S has over other cars is the software nature of the design. Tesla has promised at least four software enhancements per year. These upgrades are done over the internet, no need to visit a service center. They add new features and capabilities, improve battery life and make existing features better. All at no cost to me. The reason I may not trade in my Model S is because it becomes a new car 40 times over the ten years. I took delivery of the car in June and I’ve had three upgrades so far.
The next obvious elephant in the room is range. Range anxiety is apparantly running rampant across the country, perhaps the world. The pharmcutical companies have a big business opportunity here. I frequently get this question these days, “What happens when the battery runs down?” I reply with, “The same thing that happens when you run out of gas. My guess is you don’t often run out of gas.”
My commute is very short. Let’s call it a 10 mile round trip. My 60kW battery has a range of 205 miles. That makes me the poster boy for an electric car. However, I know many other Tesla owners that commute 75 miles each day and have been doing it for a year in their Model S. They seem to be just as mentally stable as your typical gas car owner.
It takes my home electrical grid 17 minutes and will use 3.3 kW to recharge that 10 miles. I pay .04999¢ per killowatt hour. So it costs me .16¢ per night to recharge the battery. If I were to make that same commute over ten years, accounting for weekends and days off, it adds up to a grand total of $387 for the entire decade of commuting!
TESLA Mission Statement
Tesla has a mission. Elon Musk, Tesla’s CEO re-stated it in a recent email.
“Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”
Of course other car companies have a vision or mission statements as well.
- General Motors: To design, build and sell the world’s best vehicles.
- Ford: People working together as a lean, global enterprise for automotive leadership.
- Chrysler: Build cars and trucks people will want to buy, enjoy driving and will want to buy again.To create the type of exciting, efficient, reliable, safe vehicles you expect and deserve.
Ford, GM and Chrysler all sound the same. Tesla is different. It’s a Silicon Valley software firm, which means it moves fast and focuses on innovation.