What Does a Tesla Really Cost?

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Tesla’s luxurious, all-electric speedsters have everyone’s head turned. But before you trade your kid’s college fund for one, let’s evaluate how much it will actually cost you.

There are two models currently on the market from Tesla: the Model X crossover SUV and the Model S sedan. While it’s by no means a budget car, there are ways to save money when you buy a Tesla.

If you’re in the market for a “green” vehicle, you should research how costs work for electric and hybrid cars. But we’re here to talk about Tesla, so let’s look at the base costs for its eco-friendly lineup.

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Purchase price: Tesla Model S and Model X

Base prices for the 2017 Tesla Model S sedan range from $68,000 to $134,500, depending on package; the 2017 Model X crossover ranges from $88,800 to $138,800. Further upgrades are available (more on that below).

Tesla has also announced the more affordable Model 3 sedan, which the company says will sell for $35,000. Tesla is accepting a $1,000 “reservation” fee for the Model 3, expected to begin production in mid-2017.

2017 Tesla model base prices

Tesla modelBase price0-60 speed (seconds)Range (miles)Top speed (mph)
S 60
$68,000
5.5
218130
S 60D$73,0005.2218130
S 75$74,5005.5259140
S 75D$79,5005.2259150
S 90D$89,5004.2294155
S P100D$134,5003.1315155
X 75D$88,8006.0237 130
X 90D$98,8004.8257155
X P90D$138,8003.8250155

D signifies all-wheel driving capability; P signifies the “performance” category.

Tesla launched the all-electric Model S in 2012. It’s a hatchback sedan that competes with luxury brands such as BMW and Mercedes. It can accelerate from zero to 60 mph in 5.5 seconds or less. It has room for seven passengers if you opt for the $4,000 rear-facing, third-row seat.

The Model S starts at $68,000, and because of Tesla’s direct-order system, there’s no haggling. Simply visit a Tesla store online or in person, configure the car as you want it, and it will be built to your specifications. The base model comes in several different flavors, which cost up to $109,500.

Tesla also offers various upgrades, the most notable of which is self-driving capability. For a $4,000 after-delivery price tag, Tesla can activate eight cameras, which pair with the onboard sonar, radar and computer to enable full self-driving in “almost all circumstances,” according to the maker. The system allows drivers to simply enter the desired destination, and the car will take the wheel.

The SUV-style Model X, which Tesla rolled out in 2015, is priced at $88,800 and up.

The Teslas currently on the market are expensive, but there are factors that reduce the cost of buying and owning one, including tax incentives, fuel savings and insurance discounts.

Remember: If you’re thinking about buying a new car, it can be a good idea to shop for an auto loan in advance and work on the numbers with an online car loan calculator.

Federal and state tax credits

A federal tax credit for buying an electric car effectively reduces the price of a Model S by $7,500. In some states, additional tax credits or rebates can knock an additional $9,500 off the purchase price. Drivers can claim rebates right after purchase or at tax time. Some states also offer noncash incentives, such as carpool lane access and free parking.

Fuel costs

Let’s use fueleconomy.gov to compare a similarly priced luxury car: the BMW 7 Series 740i. If you drive it 15,000 miles per year, spend about $2.50 a gallon and get an average 25 miles per gallon, you can expect to spend about $1,500 on gas annually. Tesla drivers will save that money, but they’ll see an increased electric bill from charging the car overnight. Tesla estimates that driving 15,000 miles per year will cost a driver an extra $602 in electricity, so deduct that from the gas savings.

Net savings: $898 per year.

Insurance discounts

NerdWallet found the lowest average insurance rates among 10 large insurers for the 2016 Tesla S60 in California and Illinois, two states with high Tesla ownership levels. Drivers can also take advantage of discounts for eco-friendly cars offered by many insurance companies.

Cheapest Tesla Insurance Rates: California and Illinois
California
USAA


Note: Available only to active military, veterans and their family members.
$1,635/year
Mercury

$1,938/year
Allstate

$2,406/year
Illinois
USAA


Note: Available only to active military, veterans and their family members.
$1,707/year
Country Financial

$2,153/year
American Family

$2,214/year

Methodology: NerdWallet averaged rates from the largest insurers for 30-year-old men and women in 10 ZIP codes per state with 100/300/50 liability insurance limits, 100/300 uninsured/underinsured motorist bodily injury coverage, and collision and comprehensive with a $1,000 deductible. 

Insurance quotes vary greatly by company, state and individual driving record. It definitely pays to compare rates.

What about the Model 3?

If you’ve done the math and would rather wait for the more affordable Model 3, you’re not alone. In fact, almost 400,000 people have signed up to reserve a Model 3 to date. Just getting on the waiting list costs $1,000, and there’s a limit of two per person. The company will start production in the middle of this year, and those reserving now can expect delivery in mid-2018. Meanwhile, the new Chevy Bolt is stealing some thunder from Tesla with 238 miles of range and a price tag in the same neighborhood ($37,495).

Tesla has dedicated a special FAQ page to questions about reserving the Model 3 and is releasing regular updates on details of the car — without divulging the complete breakdown.

Just remember: State incentives don’t last forever, and you shouldn’t count on them for future cars. Plus, while $35,000 is far less than even the cheapest Model S, you may still want to buy upgrades when the base Model 3 is completely unveiled.

Nicole Arata is a staff writer at NerdWallet, a personal finance website. Email: narata@nerdwallet.com. Additional reporting from Robyn Parets.

Updated Jan. 18, 2017.