Electric cars are here to stay. Manufacturers of traditional gasoline powered cars, like Ford and GM, are starting to jump into the electric vehicle market. It’s not difficult to imagine that at some, possibly not-too-distant point in the future, the majority of new cars sold will be electric vehicles, or EVs. EVs have several distinct advantages over gasoline cars, from a lack of pollution and money saved on gas and maintenance to potential tax credits, but the initial cost of electric cars is still too high for many Americans. Accounting for the savings, are EVs cheaper overall or are gasoline cars still the best deal out there?
Tesla Model 3 vs. BMW 3 Series
Tesla has the price of a luxury vehicle, but how does it actually stack up to a BMW? To get close to an apples-to-apples comparison, we decided to compare the Tesla Model 3 LR AWD to the BMW 3 Series M340i xDrive AWD. Performance specs are similar; the BMW has slightly more horsepower, and the Tesla has a slightly quicker 0-60 time. Initial costs are close. The Tesla is about $7,000 cheaper, $46,990, compared to the BMW, which is $53,961.
The Tesla Model 3 turned out to be much cheaper than the BMW over the first 5 initial years of ownership (and it likely would have been even cheaper if we looked at a longer period of time). The Tesla costs less to maintain, less to drive, and has a greater resale value. Altogether, the cost of owning the Tesla for 5 years would be about $26,651, assuming it is sold back at an average resale value, and the cost of owning the BMW for 5 years would be a whopping $46,012 – almost $20,000 more than the Tesla!
It’s not surprising that owning a Tesla is cheaper than owning a BMW; although the initial price of a Tesla lands the car firmly in the “luxury” category, once you own the car, it costs much less to drive and maintain than a typical luxury vehicle. BMWs require premium gasoline, which is very expensive, aren’t known for being the most reliable cars (service and repair costs in the first 5 years normally total almost $10,000), and don’t have a great resale value when compared to the high initial purchase price. What if we compared a Tesla to a car that has a lower initial price, is cheap to drive and maintain, and has a great resale value?
Tesla Model 3 vs. Honda Accord
It probably isn’t fair to compare the base model Tesla to the base model Honda Accord; those considering purchasing a base Accord probably aren’t also considering a Tesla. The Honda Accord EX-L 2.0T might be a closer match to the Tesla Model 3 SR. The initial cost of the Accord is much cheaper, at $31,942 compared to the Tesla’s $39,416, but performance specs are similar. The Tesla has slightly more horsepower and is a little quicker, but the Honda Accord is no slouch.
The Honda Accord is affordable to drive and maintain, and holds its resale value quite well. The initial 5 years of ownership would come to about $24,400, making it a quality, affordable vehicle. The Tesla is cheaper to maintain and drive than even the Honda Accord, and retains its value just as well. After 5 years, the cost of owning the Tesla is expected to be about $24,033 – slightly less than the cost of owning the Honda Accord.
Electric vehicles, like the Tesla, can match the performance of luxury cars and save thousands in the long run. We have also discovered that affordable electric cars can compete with non-luxury gasoline vehicles on price. Teslas won’t be replacing base model gasoline cars anytime soon, but shoppers looking for a mid-range vehicle might want to take a closer look at electric vehicles.
We took a close look at the numbers in our latest show to determine if Teslas really can compete with luxury cars and non-luxury cars. We discuss who buys Teslas, what they actually cost in the long run, and if your Tesla might last 1,000,000 miles, all on our most recent episode, “Is Tesla About to Revolutionize the Auto Industry [AGAIN]?” Watch it now on YouTube below.