Teslanomics Returns as Owner Claims 18-Months of Cost-Free Tesla Model S Ownership

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.

How much does owning a Tesla Model S cost you? It depends on your personal situation.

How much does owning a Tesla Model S cost you? It depends on your personal situation.

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.

Clever Math(s)

“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.”

Any time you consider buying a car, be sure to do the maths first.

Any time you consider buying a car, be sure to do the maths first.

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.

The Tesla Model S is undeniably cheaper than a comparable gas car in the long term -- but be careful to include all costs in your comparison.

The Tesla Model S is undeniably cheaper than a comparable gas car in the long term — but be careful to include all costs in your comparison.

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.

Assumptions made?

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.

Can you really have a Tesla Model S for 18 months without paying anything for it?

Can you really have a Tesla Model S for 18 months without paying anything for it?

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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  • Dennis Pascual

    Interesting that he uses the “Tesla Guaranteed Resale program”. That program had some pretty strict mileage limits. And I am pretty sure 35,000 miles a year is beyond that.

  • Ad van der Meer

    A little further down in the discussion at the Teslaforum somebody mentions he has not included the depreciation of a comparable ICE powered car. nSo what if he’s $2000 off? Imagine driving a Model S for 18 months for in total $2000…

  • jim murphy

    An ICE would have to be serviced to maintain the manufacturers guarantee … Tesla guarantees with no such restriction

  • vdiv

    Last time I looked at it (a month ago) I would have to pay something on the order of $1,200 a month (72 months, 3%APR) to finance a ~$90k Model S. Yeah, I’m sure for most of us that would appear under the “free” category in their ledger. nnnnSo let’s start piling up, annual property tax = 3%, annual EV registration fee = $64, comprehensive insurance premium over a $30k car = 200%, liability insurance premium for a performance car = another 200%, for a RWD it needs winter tires = $1,000, a new set of summer tires after just 18 months = $1,200 (or new cam bolts), Tesla’s annual maintenance plan $600, attending the mandatory TMC convention + other events, priceless. :)nnnnSounds like Tesla should just give them away at this point 😉

  • Ezzy

    20 MPG is pretty generous for a similarly horsepowered and sized ICE sedan.

  • D. Harrower

    Not sure where he comes up with his resale numbers either.nnHis $96K purchase price includes California sales tax, which will not be credited at resale. Also, the Tesla GRP only comes into effect after 3 years of ownership, not 1.5.nnThe guaranteed value is based on matching the leading car of that class, The Mercedes S-class, which only gets 45-55% of its value at resale. That is nowhere near this guy’s claimed number of “around $77k”.nnTeslas are excellent values in the long-term, but there’s no such thing as a free lunch (or car).

  • Leonard Van Ryn

    I appreciate TransportEvolved publishing this article in regard to my post on the Tesla forum. I would direct you to the actual forum for the current discussion.http://my.teslamotors.com/foru…nnIn regard to the current value of my car, I said in the forum that it ‘appeared’ I could sell it for around $77,000. I had no plans to actually sell the car anytime soon and so was just using Kelly Blue Book (KBB) values (private party sale) for my analysis, which I explain in a subsequent post in the Tesla forum. Contrary to what the article stated above, I made no reference to Tesla’s guaranteed resale value program as that would obviously not work very well in my case with all the miles I drive. nnIn any case, after making the post, it was pointed out to me that values of used Teslas have dropped below KBB values because lots of used Teslas were hitting the market as early adopters flock to upgrade to the new P85D (the fastest sedan on the planet). Whether this is a temporary situation or not, time will tell. So I do stand corrected that my car would probably not bring the full $77,000 on the used market today, as I had believed. Incidentally, this might be a great time to pick up a used Model S at a discount.nnIn any case, while we can argue depreciation rates, if I continued my fuel and service/maintenance savings say for a total of six years, it would equate to around $45,000, which I hope would address most of the car’s depreciation at that point. Theoretically, if I kept this up, it could eventually pay for the whole car.nnIn addition, maintenance savings could become an even larger factor as the car ages because of its simplicity and unlimited mileage drive-train warranty (8 year). How many of us have experienced major drive-train (e.g., transmission) repair bills in the 100,000 to 250,000 mile range with our ICE cars. In my case, Tesla will be covering me (without mandatory servicing) until around 250,000 miles.nnnIn regard to servicing, there is so little that is needed for the Model S. Maybe change brake and battery fluid every 3 to 5 years and gear oil about every 10 years. The brake pads will virtually never wear out with regenerative braking doing most of the work. Obviously, items like tires, wiper blades, and cabin filters just get replaced as needed. nnnIn regard to insurance, I am paying rates comparable to my previous car (Mercedes ML350). In talking with other owners, I’m hearing similar experiences. If you really want to know, ask your agent for a quote.nnnnAgain, thank you for your interest and feedback.