Wow, it’s been a while since my last update. Life has been busy and, until recently, relatively quiet on the Tesla living front. Now I have a few new things to write about so let’s get to it.
Near the end of May, I hit the 100,000-mile mark on my 2014 Tesla Model S 85. I’ve really enjoyed owning and driving the car and, while I’ve criticized certain aspects at times, I’m a huge fan.
My premise going into the Model S was that it would be roughly equivalent in total cost of ownership to my prior car, a 2007 Acura MDX after about 7 years of ownership. That speculation has led to almost 400K views over on Quora and a lot of discussions.
With detailed records for my first 100K miles on both cars, it’s time to see how things are looking and speculate on where we end up.
2007 Acura MDX to 100K miles
I bought my 2007 Acura MDX new and drove it to 200K miles before handing over to my daughter who added another 40K miles before it was time to let it go. While people may argue with the prudence of this, I had the dealer I bought it from service it from the beginning to the end and did all the recommended maintenance on it.
The Acura was a good comfortable car and had features that my Tesla (and even newer ones) still don’t have but it was also inferior in many ways.
Here are the costs for those first 100K miles on the Acura:
- Service Costs: $8,164
- Miles per set of tires: 50,000
- Initial annual insurance cost: $900
My thought process was to compare the Model S decision vs buying another Acura MDX, so the 2014 Acura specs were:
- New price: $55,246
- Average Expected Mileage: 25 MPG
(based on experience on 2007 MDX and improved MPG on 2014 MDX)
- Gas would have cost: $11,798
(Gas cost varied between 2014 and 2018 and I tracked it)
Excluding the insurance (more on that later), the total cost of ownership for the 100K miles would have been $67,044.
2014 Tesla Model S85 to 100K Miles
I bought my 2014 Telsa Model S 85 in April 2014 before the Autopilot and AWD days. Like the Acura, I tracked the mileage and service costs.
Here are the costs for those first 100K miles:
- Car price: $93,970
- Service Costs: $7,833
- Miles per set of tires: 50,000 summers, 32,000 winters
- Electric cost: $5,428
(I tracked my electric costs through the period which included benefits from SolarCity)
- Initial annual insurance cost: $800 (insurance prices decreased)
The insurance on my Model S was actually less expensive than the Acura so I’ve left that out of the considerations. Also, the lost utility of the money between the Tesla price vs the Acura price isn’t accounted for (interest etc).
Excluding the insurance (more on that later), the total cost of ownership for the 100K miles was $107,231.
My cost of ownership for the first 100K miles on the Tesla was $40,000 more than it would have been had I just bought another Acura MDX.
The Tesla was $40,000 more expensive to own for the first 100K miles
While service costs were lower than the Acura, they were not significantly lower. This is partly explained by the cost of the tires on the S vs the MDX and the need to have both Winter and Summer tires (no AWD) on my S which led to less life on one of the sets of tires. Another surprise was that large non-mechanical items (dash display) failed during the period which also significantly impacted the expense.
Service costs were basically the same between an ICE car and the Tesla
While there were significant savings in going electric vs gas, it was not the same level of savings that you see quoted or discussed online — it was about 50% less expensive for the energy to drive the Tesla versus an MDX. This is explained by a few things:
- Gas efficiencies get better annually (MDX went from 20MPG to 25MPG from 2007 to 2014)
- I live in Massachusetts where the electricity prices (even when offset significantly by lower solar costs) are some of the highest in the US
- EVs are much less efficient in the Winter and New England is known for our bad winters
Energy costs were 50% of an ICE car
Would it ever make sense?
I have the benefit if knowing how service costs changed on the MDX for the next 100K miles. Average service costs per mile climbed from $0.05/mile to $0.09/mile on the Acura as many of the ICE-type parts wore out etc. The car was quite driveable for the entire time but it was getting a lot more expensive to keep on the road.
I don’t have personal experience on the Tesla’s longer-term maintenance, and, while the promise is that it would hold up better for longer, it’s not something that I can prove to myself despite a few data points that it does well.
Assuming the next 100K miles went about the same as the first 100K miles with service, insurance, and efficiencies about the same, the gap would close somewhat with these estimates:
- Acura 200K TCO: $95,150
- Tesla 200K TCO: $124,500
Or a gap of $30,000.
If I use actual Acura costs to 200K I get a TCO of $102,000, or a gap of $22,000
Even if the Tesla service costs hold steady to 200K miles while the Acura service costs climb, there’s no chance of hitting breakeven.
And, of course, I’m comparing a 7 (adult) seating SUV vs the 5+2 Model S. Had I gone with an ICE sedan as a comparison the gap would have been worse.
Back in 2014, I managed to convince myself that getting a Tesla was a good idea and, while I have no regrets about making that decision, it wasn’t a great financial decision for a number of reasons.
- Energy costs are much higher than expected
- Service costs are higher than expected
- Lack of AWD/SUV led me to more expensive and faster-wearing tires
The Model 3, with a lower initial cost and updated battery technology, has a better chance at breaking even over a longer term, but from my experience, I think it will still be a tough call, especially if compared against cars in a similar class.
While the financial aspect of owning the Model S wasn’t necessarily the best move, there were all sorts of other benefits that are hard to quantify that have made it a memorable experience.
I created sites like EVTripping.com, worked on great products like TezLab and learned a lot of new technologies along the way which helped me grow personally and professionally.
The Model S and the community were also good anchors through some rough years on a few different fronts in ways that a “normal” ICE car/decision wouldn’t have been.
Is buying a Tesla a great financial decision? No.
Is it a good idea anyway? It was for me without a doubt.
I share the same sentiments. I came from a 2006 Toyota 4Runner Sport 4WD to my 2013 S, optioned much like yours. I hands down spent far more than getting another Toyota, but I was cross shopping Infiniti M37, BMW 5 series, Lexus GS, MB E-class, so I wasn’t too far off. But deciding on the Tesla for me was never a financial decision. More fun and enjoyment after getting a very safe care were my key points, with being an EV being icing on the cake. Now I can’t even imagine buying an ICE ever again!
Definitely agree, its hard to go back to an ICE.
DAVID A BRYANT said:
Looking back over your recent posts, I want to ask: Where are you on the decision around Model 3? Will you get one? Or do you plan to hold onto the Model S indefinitely? I see you want the AWD (which is now available) and a tan or cream interior (not yet available). i have similar preferences. The lease for my Model 3 will be up soon, and I am torn about what to do, and leaning towards keeping my S rather than compromising on features I would want on the Model 3. Plus a Model 3 would actually be a bit more expensive than buying out my lease. My second question is how you got 50,000 miles on summer tires?! The service center tells me i need new tires for my 70D after only 32,000 miles. I have the Michelin tires that were provided in 2015. I do not think I am a driver who abuses his tires, and I watch the tire pressures carefully. They are worn evenly so alignment and balance did not cause premature wear. So, I was surprised you did so much better on the S85 with (presumably) similar tires. Thanks!
The 3 vs S decision update is coming. The TLDR version is I went with a new S (still waiting on delivery). More on the process and decision coming soon.
The Michelin Primacy M4 tires that came on my 2014 S85 got 49,552 miles, the Winter Nokkian R2s got 32,125 miles. I rotated every 5K miles and checked air in the tires weekly. Other than good/normal tire care I didn’t do anything special. Also, the Michelins had a plug in them from the first month on thanks to a screw I discovered in some parking lot…
Congrats! I look forward to that write up. I hadn’t thought you would be trading for another year or two at all. Happy to be wrong.
Thanks for this report! It would be interesting to see residual value taken into account in the TCO. Neither the MDX nor the S are worth $0 after 100k miles. If you can estimate residual value, you could compute depreciation use that in the TCO instead of initial purchase price.
Yeah, hard to say for sure since I didn’t sell them at the same point. We put another 140K miles on the MDX after it hit 100K miles. The Tesla, well that’s a story coming soon…
Albert Hibpshman said:
While the MDX and S are not directly competitive cars it is interesting that a lot of people who would never consider a Mercedes S Class are buying Teslas. Amazing that the cost was so close for vehicles in vastly different classes. People comparing a Toyota Camry to a Tesla Model 3 will be next…again, people jumping several classes to buy the Model 3 while making big sacrifices to afford one. Conclusively I would say for the vast majority cost is NOT a primary concern when buying a Tesla. The Tesla Mission is primary.
A couple comments/questions:
There are several mentions of “more on the insurance later” – is this referencing an upcoming post?
Also for insurance, I’ve personally had a continuous increase in quotes (with no accidents or other marks to blame) – when purchasing the vehicle in MO in 2015, the 6 month insurance cost in total was $450, while three years later in TX the lowest rate is $600 per six months, with $500 of that being the collision with 1k deductible!
Cost evaluation: if you projected out to seven years so that you are comparing years of ownership instead of odometer miles, what’s the situation look like? Part of my convince-myself-rationale was you have less wear&tear per mile, so you will have more years of use of the vehicle than an ICE.
I actually forgot to get back to it. The insurance cost was the same for the MDX and the Tesla when I first got them so that was a wash. It was about $900/year back then. The current cost to insure a Model S for me is $1,200. Note that it varies a lot by company, how much you drive, where you live etc.
The gap was such that I wouldnt break even owning a Tesla unless I kept it at least 200K miles.
Beaumont Vance said:
I am very curious how the mileage range (battery storage) after 100k miles. And what would it expect to do at 200k. If we are comparing TCO, that would seem to be relevant.
I have read horror stories about fixing a Tesla out of Warantee…
Battery degradation has shown to be minimal through 400K miles on some of the TesLoop teslas. The out of warranty repairs are cheaper than paying for the extended warranty in my experience. Getting parts can supposedly be a problem but I’ve never had an issue.
For your reference to getting parts – my pre-refresh S was involved in an accident on 08June…exterior/body repairs weren’t complete until 13Aug due to “waiting on parts” and even now, still waiting on a switch to clear the “airbag light”.
Enjoyed your comparison. My late comment is that I didn’t quite get your math. For the Model S, you included initial price, service (which must include tires), and electricity.
But, for the Acura, you included initial price, and the gas, but left out the $8,164 service costs?!? Rather than a $40k gap, shouldn’t it have been only $32k?
Also, TCO, should factor in a disposal value, because people will take your 100k cost for the Acura at $67,044 and divide by 100k miles and come up with a 67cent per mile operating cost, which isn’t actually correct, but that’s what they’ll do, if you call $67,044 the TCO.
Another way to look at it is operating costs, and financial costs. Operating costs would have the Acura at $19,962, or 20 cents a mile. And for the Tesla, $13,261, or 13 cents a mile. For financial costs, you take your purchase price and back out the disposal value after 100k miles. The disposal value is quite important because if the Tesla retains its value better than the Acura, which I would guess it does, then the cost gap is narrowed, and the TCO is not quite as far apart.
Brett Lipton said:
This comparison should be titled Cost of Ownership… If I threw out my cars at 100k/200k. You’ve negated residual value, which I imagine would being the per mile Tesla cost below the Acura simply based on the fact that the lifespan of even a good Honda is 300K miles max, whereas the Tesla could easily be over 500k. The fact is a 200k Honda is geriatric, 200k Tesla is not even middle aged.
It was my TCO for the 100K miles of ownership so it was titled correctly. I haven’t owned a Tesla past 102K miles so I can’t talk to how far/long they will last other than the same videos you’ve seen, but because, like other vendors, the Tesla gets left behind as new technologies come out (autopilot, AWD, faster supercharging, more range) I rarely want to keep a car for more than 4-5 years as I’d like to have the latest advancements even if my car is still going well. Hence I look at the costs over my period of ownership.
Brett Lipton said:
A quick KBB check puts the value of the S @ $30K and the MDX @ $15K, so the respective total costs after figuring in depreciation go respectively to $77230 and $52050 or Cost Per Mile of approx $0.77 and .0.52, slightly closer gap than $1.07 and $0.67
I can’t believe that in your 100k TCO evaluation that you don’t take into account the current value of the car, that hugely affects the cost to 100k miles.
I think you mean if I sold them at that point? The original cost was in there so it would be the sell point. If you’re really optimizing TCO you’d keep them until they were end-of-life. The MDX was hypothetical since I never bought the new version and the first Model S I owned I upgraded long before its end of life as I wanted Autopilot and FSD.