As a Tesla owner, you’ve certainly stumbled across information touting how your Tesla can save you money in the long run by curbing that gasoline dependency, or put more money back in your wallet by capitalizing on various Tesla-only tax incentives and other cash saving loopholes. However, like many others, are you still wondering if you're doing enough, or taking advantage of every opportunity presented through your ownership of your eco-friendly ride?
Well, you’ve come to the right place. We’ve done the research and compiled a comprehensive overview of every cost-savings consideration, incentive and opportunity today for Tesla owners. Here’s what we’ve found.
Overview of Cost Savings
Charging Your Tesla Vs. Spending At The Pump
First, it’s important to note that the cost to charge your Tesla is going to depend on a few factors such as the model of your Tesla, the size of your battery, the charger you are using and your charging habits. So, for the means of this analysis we’re going to make some assumptions and use the best national averages we can find.
Based on the above assumptions we get an average monthly spend on gasoline totaling $86.80 and an average monthly spend on electric charging totaling $37.80. This results in a $49 dollar (or 56.4%) savings per month in charging an EV Tesla over a standard ICE vehicle. For the means of this article, let’s look at the associated savings after five years of ownership and then assess what a break-even point might be. So, after five year of ownership of your Tesla, you’d save somewhere around $3,000 from charging versus filling up at the pump.
Cash Incentives and Tax Credits
Now, another great way to make back some extra money through the purchase of your Tesla is through state and local cash incentives and tax credits. Cash incentives typically come in the form of a rebate based on EV ownership or solar panel ownership. At one time, EV owners even benefited from a federal cash incentive to purchase electric vehicles, but unfortunately this is no longer an option.
But, depending on the state you live in, you’ll have access to some great cash incentives at the state level. California residents for example can benefit from the Clean Vehicle Rebate Project1 and receive up to $2000 back on the purchase of their EV vehicle. Further, through this same program, based on your income eligibility, California residents could receive a rebate of $4,500 or a $5,000 grant! If you’d like more information on rebates specific to your state, check out Tesla’s comprehensive guide on incentives2.
Outside the state rebates and tax incentives, local utility companies may offer incentives as well. Electric companies want your business and they are often willing to give you a rebate to switch over from an ICE to an EV. These rebates vary from company to company, but we have seen power companies offer up to $800 in the form of a rebate to switch to an EV. For example, California owners can benefit from PG&E rebate totaling $8003 for switching from an ICE to an EV.
Based on the above assumptions we get a total initial savings of $4,000, however this could be greater depending on if you qualify for any income-based cash incentives and/or grants and how much your electric company is offering for customers to move from an ICE to an EV.
Tesla-Specific Insurance Discounts
Did you know that Tesla actually offers insurance? It’s true. Tesla is looking to lower the cost of ownership for new and existing customers through offering price competitive insurance. As you may know, insuring an EV through a typical auto insurance company tends to cost more than insuring an ICE. So, to combat these higher rates, Tesla offers auto insurance that is 20-30% cheaper than the rate you’d receive through a typical auto insurance company. Keep in mind this program is currently for California residents only. So, if you’re paying more than you’d like to insure your Tesla, consider checking out Tesla’s Insurance Options4.
Based on the above assumptions we get a total savings through Tesla specific insurance of $1,500 to $2,500. This is calculated over a five year period of ownership.
Third-party Services
Aside from these common avenues for racking up the savings through your Tesla ownership, there are many third-party services that also help bump up your cost savings. On average, California residents pay 18.31 cents/kWh, resulting in an average monthly electricity bill of $101.49 5. However, time-of-use customer whose rates change throughout the day can reduce their costs from 48 cents/kWh to 17 cents/kWh by only charging during off-peak rates 6.
The free app-based service Optiwatt will track your electricity rates and automatically schedule your Tesla to charging during the cheapest rates, saving users an average of 70% on their electricity bill.
For California residents, these savings add up to about $4,200 over a five year period. Although gas savings are accounted for above, those savings are calculated based on consumer averages, whereas third-party apps such as Optiwatt can reduce your electric bill significantly further.
What The Data Shows
Of course, for the means of this article we’ve been making some pretty high level assumptions around fuel savings predictions since we’re really looking to prove or disprove if your Tesla can really pay for itself. A deeper analysis of Tesla’s fuel savings can be found in this article: Tesla surpasses 2020 fuel savings predictions.
Summing It Up
So, if we take a step back and look at the total cost savings with the intention for your Tesla to pay for itself, well, it's a bit of a stretch. Let’s do the breakdown.
Through our estimation, we arrive at a total savings of around $13,700 over the course of five years of ownership. Don’t get us wrong, this is a great savings opportunity and makes the total cost of ownership of your Tesla much lower than what might have expected. But is it going to cover that MSRP price tag? Unfortunately not. However, there are some other considerations if you’re still looking to make your Tesla pay for itself.
How To Make Sure You're Getting The Best Savings
Cash Incentives and Credits: Remember that each state is going to have unique EV-specific cash and tax incentives that you can benefit from. So, to maximize your savings, make sure to do the research specific to your state to learn about any and all of the cash and tax incentives you have access to through ownership of your Tesla.
Tesla-specific Auto Insurance: If you're a California resident, make sure to check out the insurance options that you have access to directly through Tesla. This perk can potentially save you save thousands of dollars in the long run.
