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 available for immediate purchase from Tesla: the Model X crossover SUV and the Model S sedan. While they’re by no means budget cars, there are ways to save money when you buy a Tesla.
Tesla has also begun fulfilling orders for its Model 3, a car soaring in popularity because of its more affordable price tag: $35,000 before incentives. But unless you’re a Tesla employee or you already own a Tesla, getting your hands on a Model 3 will likely take more than a year.
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 lineup.
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Purchase price: Tesla Model S and Model X
Base prices for the 2017 Tesla Model S sedan range from $69,500 to $140,000, depending on the package. The 2017 Model X crossover ranges from $79,500 to $145,000. Further upgrades are available (more on that below). Earlier this year, Tesla updated its model options, discontinuing the Model S 60, S 75, S 60D, S 90D, X 90 and X 90D and adding the S 100, X 100D and X P100D.
2017 Tesla model base prices
|Tesla model||Base price||0-60 speed (sec)||Top speed (mph)|
Range: 259 mi
Range: 335 mi
Range: 315 mi
Range: 237 mi
Range: 295 mi
Range: 289 mi
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 4.2 seconds or less. It has room for seven passengers if you opt for the $4,000 rear-facing, third-row seat.
The Model S now starts at $74,500, 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 $135,000.
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 that pair with the onboard sonar, radar and computer to enable full self-driving in “almost all circumstances,” according to the maker. The system lets drivers simply enter the desired destination, and the car will take the wheel. Choosing this feature requires that you also spring for the enhanced autopilot option, an additional $6,000 after delivery — making the entire self-driving capability a grand total of $10,000 extra.
The SUV-style Model X, which Tesla rolled out in 2015, is now priced at $79,500 and up.
These readily available Tesla models are expensive, but there are factors that reduce the cost of buying and owning one, including tax incentives, fuel savings and insurance discounts.
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 up to $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 car pool lane access and free parking.
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 on gas and get an average of 25 miles per gallon, you can expect to spend about $1,500 on fuel annually.
Tesla drivers will save that money, but they’ll see an increased electric bill from charging the car overnight. To offset this, Tesla offers 400 kilowatt hours of free charging at its Supercharger stations each year, enough to drive approximately 1,000 miles. After this credit and based on the national average rate of 13 cents per kWh, charging your car at home would cost about $609 for the Model S and $690 for the Model X for 15,000 miles of driving a year. So we’ll deduct this from the gas savings.
Net savings: $891/$810 per year.
You can use Tesla’s charging costs calculator to customize your savings based on the cost of gas and electricity in your area.
NerdWallet found the lowest average insurance rates among 10 large insurers for the 2017 Tesla models in California and Florida, two states with high Tesla ownership levels. Drivers can also get discounts for eco-friendly cars offered by many insurance companies.
Cheapest Tesla insurance rates: California and FLORIDA
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 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. More than 500,000 people have signed up to reserve a Model 3 to date. The base version of the sedan will start at $35,000, have a range of 220 miles and go from zero to 60 mph in as little as 5.1 seconds.
Tesla describes the Model 3 on its website as: “a smaller, simpler, more affordable electric car” and “the safest car in its class.”
The company requires a $1,000 reservation fee for the Model 3 and is fulfilling orders within 12 to 18 months. Priority is given to Tesla employees and current owners of Teslas and then based on when you place your reservation. Reservation holders get an email when it’s their turn to place an order, then configure their car on the website and find out when it will be delivered. Tesla has dedicated a special FAQ page to questions about reserving the Model 3 and is releasing regular updates on details of the car.
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 for your Model 3, which will close that gap.
» MORE: In the market for a new car? Check out our car payment calculator to predict your monthly payments.
Nicole Arata is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Additional reporting from Robyn Parets.
Updated Oct. 5, 2017.