Sorry, But You Can’t Lease A Tesla Model S in London For The Effective Price of £0: The Teslanomics Don’t Work.

If there’s one thing California automaker Tesla Motors is good at (other than making the fastest, longest-range semi-autonomous electric cars on the market today) it’s making a good case that you really need to own one of the aforementioned fastest, longest-range semi-autonomous electric cars. And to help you, the would-be Tesla owner, it even includes some helpful online tools on its website to help you figure out just how much it would cost to lease or purchase a Tesla.

As you might expect, it uses every conceivable discount or saving that you stand to get from owning a Tesla over a conventional similarly-priced car, from any purchase incentives offered in your home country through to money saved from not buying petrol, gasoline or diesel. Termed ‘Teslanomics‘ by Tesla fans and auto industry insiders alike, the figures usually make a compelling argument — proving not only that someone can afford to buy a Tesla but proving that they cannot afford not to buy one.

Teslanomics might be attractive, but they're not real-world.

Teslanomics might be attractive, but they’re not real-world.

But over in the UK, the Teslanomics of Tesla’s online configurator for the recently-reintroduced Tesla Model S 60 claims that it’s possible to lease a brand-new Model S 60 for just £119 per month if you happen to drive into or live inside London’s Congestion Charging zone. Tweak the calculator a little more, as our friends over at Electrec discovered, and you can even get the Teslanomics calculator to give you a rate of nothing per month in effective lease fees.

That’s right. Lease a brand-new Tesla Model S for two years for nothing per month.

The special £0 effective payment require some special maths.

The special £0 effective payment require some special maths.

Sadly however, reality isn’t quite as clean cut as Tesla’s online calculator might appear and for that, we feel obliged to note just how specific things need to be before you can claim to lease a brand-new Model S for £0 per month.

First off, the figures in Tesla’s online calculator factors in the nationwide £4,500 government grant offered to anyone purchasing a new electric car in the UK. Applied at point of sale, it is effectively an instant £4,500 discount off the list price for the Model S 60 of £53,400 (plus £380 in registration fees).

Then the maths get a little fuzzy. Assuming the average brit drives around 12,000 miles per year and spends approximately £1,600 per year on fuel in a car that manages 39.2 miles per gallon, Tesla claims that same average driver (charging 90 percent of their time at home on electricity at 14 pence per kilowatt-hour) will save around £6,000 in fuel bills in five years of Model S ownership. (It’s worth noting however that Tesla’s 24-month lease term — the one which gives you the net £0 effective cost — also requires you to drive no more than 10,000 miles per year, so presumably Tesla has adjusted its figures slightly to take this into account).

Tesla’s calculator also assumes the person leasing the Model S is doing so under a company car scheme associated with their job. While company cars are still offered in certain industries in the UK as part of an employee’s total compensation package, they’re far more rare today than they once were due to the way HMRC taxes company car perks. Indeed, it’s now usual for only upper level management to be offered their own company cars (unless they’re in a job which requires huge amounts of driving), and most employees who are required to drive for work must use their own vehicle and then submit mileage claims to their employer to be reimbursed at a set rate per mile travelled.

Nevertheless, since electric cars attract the lowest level of Benefit in Kind tax (BIK) from HMRC, Tesla has factored this into its calculation too.

If you want a Model S 60 with this specific deal, you'll need a massive down payment.

If you want a Model S 60 with this specific deal, you’ll need a massive down payment.

Next — if you happen to live or drive into London every day — the calculator takes off the total fees associated with driving an internal combustion engined vehicle into London’s Congestion Charging Zone. While regular gasoline and diesel-powered cars (essentially any car that emits more than 75 grams of CO² per kilometer) are charged a total of £10.50 per day to drive in the center of London if you sign up for autopay, or £14 per day if you pay by midnight the following day, electric cars are exempt from the London Congestion Charge. And while you do have to pay a once-yearly ‘ £5 administrative’ fee to register for this exemption, it’s a perk that could save you a lot of money when compared to a conventional fossil-fuel vehicle. 

Tesla, naturally adds that in too. It claims a total of £12,600 are saved over five years of ownership, but we’re calculating an annual cost of £2,730 per year, assuming you signed up for congestion charging auto pay and drove into the zone five days a week for 52 weeks a year. For those interested, that works out to around £227.50 per month.

But here’s the thing. As anyone who has lived in, worked in or regularly visited London will tell you, driving in London is a time-consuming task. Commuting into London on a daily basis is, to put it bluntly, a tortuous way to lose any free time you have left before or after work. Even if you can cope with hours behind the wheel at walking pace, parking is likely going to make driving into London entirely impractical, unless you happen to have a parking space at work that’s provided free of charge which is, if we’re honest, rarer than seeing the Queen out walking her Corgis down Pall Mall.

You'll also only be able to do 10,000 miles per year.

You’ll also only be able to do 10,000 miles per year.

With parking in London anywhere from £40 per day to £70 per day, anyone looking to buy a Tesla Model S to commute into central London five days a week, 52 weeks per year would have to factor in a parking cost of between £867 and £1516 per month.

Assuming the same person lived within 50 miles or so of London — you’d need to do that in order to sign up for the 10,000 miles per year lease deal that results in the £0 net price per month — you could buy a First-class monthly season ticket, including unlimited access to the London underground, for between £850 and £1100 per month.

On paper then, we’ve just proven it’s cheaper to take the train every day if you have to commute into central London than it is to just pay for parking and drive your zero-emission, Congestion Charge exempt Model S into town. But there’s one more very important thing anyone looking at this headline fee needs to understand: you’ll need a massive deposit in addition to all those claimed discounts and incentives to be able to get that lease fee down to the magic £0 per month in effective cost.

£16,134 or more in fact (and if that strikes you as the sort of down payment you’d expect to put down on a mortgage for a new house, then the chances are, you’re probably not someone who could make this particular Teslanomics scenario a reality, sorry). Dial in a more appropriate number for a car deposit (such as £2,000, the minimum Tesla will accept on this lease deal) and you’ll be looking at a monthly payment in excess of £943 per month before savings and £625 per month after them.

Remember too that Teslanomics accounts for net values and ignores the money you’ll have to actually fork over every month: even if you can meet all of the requirements above, you’re still going to have to find £318 per month to lease your Model S for 10,000 per year for two years, savings or not.  And while your bottom line may show you’re better off with an electric car, it’s unlikely your net savings will result in your car costing you nothing to use.

As always, you should only buy if you can really afford it.

As always, you should only buy if you can really afford it.

When it comes to Tesla’s purchase calculator for British customers, similar Teslanomics suggest that you’ll be able to afford a Model S 60 for just £34,300 after all applicable savings listed above have been applied. That’s less that the price of a range-topping BMW i3.

But of course, if you apply Teslanomics to the BMW i3, you’d probably find it pays you to own it, not the other way around.

Sadly however, we don’t live in a calculator. While it’s an undeniable fact that electric cars save you a massive amount of money on fuel and maintenance bills when compared to gasoline or diesel powered vehicles, the benefits of ownership work best when multiplied over five years or more. And sadly, however good the car, you still need to ensure you can afford the lease before you sign the papers.

Which brings us to our advice: whatever car you’re looking to buy, sit down and make realistic, informed predictions about the charges you’ll face and the savings you may or may not make. Teslanomics are fine for grabbing your attention, but they’re far from granular enough to help you make that final buying decision.


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