In the plug-in vehicle world, it’s common for advocates and plug-in owners to demonstrate just how much money they’ve saved making the switch from gasoline to electric with some meticulously-kept records, a carefully-programmed Excel spreadsheet, and usually a few generalisations.
Usually, the net result of such calculations yields a sizeable saving after a few years of ownership of a plug-in car when compared to an internal combustion engine model of comparable performance and price. But rarely do we hear of a plug-in car costing someone nothing at all to own.
Yet that’s exactly what one Tesla Model S owner in California is claiming after doing his own calculations on a 2013 Tesla Model S he’s been driving for the past 18 months.
Enter Leonard Van Ryn, who contacted us — and apparently other green car sites — over the weekend to tell us that his Tesla Model S hasn’t cost him a dime to own, thanks to a combination of free charging, generous California purchase incentives, and a decision not to pay for servicing on his vehicle.
His post over at the Teslamotors forum makes for some interesting reading.
“I purchased my MS in September 2013 for $96,000 including CA sales tax and have driven it 53,000 miles over the past 18 months (lots of road trips between NorCal and SoCal)” he writes. “I received a $7,500 [federal] tax credit and $2,500 CA rebate so total purchase cost was really $86,000.”
The cost of borrowing the money to buy the car in the first place, he notes, equates to 2%APR. So far, that’s equivalent to a total of $2,400 interest in the past 18 months.
After taking into account the purchase price of his vehicle after incentives, Van Ryn then goes on to explain that thanks to Tesla’s guaranteed resale value program, he should be able to sell it for “around $77,000 in the used car market.” Take that resale value away from the net purchase price post-incentive, and you’re left with about $9,000 of depreciation.
He then goes on to argue that unlike a conventional internal combustion-engined vehicle — which requires regular servicing in order to keep its engine and ancillaries in working order — his Model S has very few moving parts. As a consequence, he has chosen not to pay for the usual recommended Tesla servicing, choosing instead to only send his car in for free, complimentary warranty issue repairs and recalls and regular free tire rotations.
With no servicing fees, and charging provided for free at the garage where he parks and at Tesla’s nationwide network of Supercharger stations, Van Ryn says total net costs of ownership amount to just $11,400 for the past 18 months, including depreciation of the car and the interest on the money he borrowed to buy it in the first place.
Comparing those figures to the savings from not owning and operating a comparable 20 mpg gasoline car at $3.50 per gallon of fuel, Van Ryn says he’s saved $9,300 in fuel costs alone, and $2,200 in servicing.
That, for those who are paying attention, is equal to the costs paid for the Model S over the same period.
But while it makes a great headline, we feel duty bound to point out that this particular set of calculations — which we think fall into the ‘Teslanomics” sphere — rely on some pretty big assumptions.
Firstly, it assumes that the used value for the Tesla Model S quoted is actually the value that will be achieved at the point of sale. Without that used sticker price, the whole calculation falls flat.
Second, it assumes that no damage will occur from not servicing the Model S and moreover, that the lack of servicing won’t affect the retail value. As well as being contrary to Tesla’s own recommendations for service intervals, there are moving components on any electric car — specifically in the steering, suspension and braking system — which benefit from regular maintenance and care. While those components may not fail for many tens of thousands of miles, regular servicing helps prevent sudden breakages. And that’s why used cars are generally worth more if they have a full service history to go with a clean title: it tells the prospective owner that the car has been properly cared for according to manufacturer’s recommendations.
Finally, it assumes that while not servicing the Tesla Model S is acceptable, it assumes servicing an ICE vehicle is mandatory. While not servicing an ICE car is far more dangerous to the vehicle over time than not servicing a plug-in vehicle, it does seem a little unfair to include this figure in the ICE car column when the decision to service or not seems to be a personal one.
Cheaper, but results may vary
While we’re a little critical of this particular breakdown, one thing is relatively clear to anyone willing to do the sums: buying a plug-in car over a traditional gasoline car will cost you more in the short term, but thanks to plug-in car grants and low running costs it doesn’t take long for the savings to add up.
Has Van Ryn’s Model S really cost him nothing in 18 months? Without a thorough, detailed calculation it’s hard to say, but we have seen cost of ownership calculations before along similar lines that illustrate a sizeable saving over a gasoline vehicle.
As with any car purchase however, you should always devote some time to carrying out a thorough analysis of your own personal situation before making the decision to buy.
Remember to include: cost of finance; incentives; discounts (if any); electricity costs; servicing costs; tire costs; car hire costs (for trips beyond your range if you wish to take an alternative vehicle); insurance; depreciation; general wear and tear.
Have you done any total cost of ownership or partial cost of ownership calculations? What did you discover? Share them in the Comments below.
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