The biggest put-off for new electric car buyers is how much electric cars cost. But the biggest question in these buyers’ minds is if these cars pay themselves off. Electricity is much cheaper than gas, so these cars will make up for themselves in the future, right?
Do electric cars pay for themselves? Yes, electric cars pay for themselves, but it takes around 6 years on average. As gas prices rise, the rate at which electric cars pay for themselves also increases. But with the rise in gas prices also comes a higher demand from consumers for EV’s, which raises the initial cost of the vehicle.
A major selling point for these electric vehicles is a promise of affordability. In this article, we will compare a 2021 Tesla Model 3 to a Mazda 3 and dig into the purchase price, fuel costs, maintenance, depreciation, and when the savings might catch up.
|2021 Tesla Model 3 Standard Range||2021 Mazda 3 2.0L Sedan|
|Maintenance/Repairs||$282 per year avg. 0.6% of the purchase price||$1450 per year avg. 6.7% of the purchase price|
|Depreciation||44% in 5 years||50% in 5 years|
For the past few years, electric cars have become incredibly popular. Automotive manufacturing companies with long histories of building reliable cars have been surpassed by younger companies when it comes to electric vehicles. For example, Ford has been building vehicles for ages but has only recently put out electric vehicles, such as the Lightning and Mach-E. Compare that to Tesla which put out its first car, the Roadster, in 2008 but now sells more Model 3’s and Model Y’s by over 100,000 units compared to the runner up (which happens to be the Mach-E). Not to mention, this EV craze comes after over a decade of hybrid popularity.
Initial Purchase Price
Square one for this comparison is the initial purchase price, or the Manufacturer’s Suggested Retail Price (MSRP). This is the price you would pay if you were to go to the dealer and drive the new car off the lot. For this section, we will be using data borrowed from Edmunds.com.
For the 2021 model year, the Tesla Model 3 4-door sedan comes in at $43,190 for the Standard Range Plus package. Any upgrades or extras obviously would be more money. Other options include the Long Range and Performance packages which retailed for about $51,000 and $61,000 respectively. For a high-end, cutting-edge luxury vehicle, this price is actually fairly comparable to other cars. But we can’t talk about all the cars.
The Mazda 3 2.0L Sedan MSRP came in at $21,645, which is half of what the Model 3 cost. Other options included the 2.5L select package, which was the most popular, at $23,627. At the top is a 2.5L turbo premium plus package with all the bells and whistles coming in at $33,934.
For the sake of comparison, we will just compare the two lowest packages: the Model 3 standard range at $43,190 and the Mazda 3 2.0 at $21,645. Again, that’s a price difference of $21,545, which means you can almost buy 2 Mazdas for 1 Tesla. The actual sale prices may vary due to regional inventory supply and demand, the sales tactics of car salespeople, and any sales or incentives. Some people might have been swayed into the Tesla for its long-term savings which we will dig into below.
All vehicles consume some form of energy to move down the road. Historically, gasoline or diesel has been used in all cars, which has led to the nationwide network of roads and highways being populated with gas stations. In response to the rise in popularity of EVs, more and more charging stations are being installed across the nation. This included the Tesla Superchargers which can get a full charge done in about 20 minutes. However, it is often more convenient to charge at home but requires some special equipment.
The Tesla Home Charger is the best way to charge a Tesla in a home garage or driveway. They charge at a rate of 44 miles of range per hour, which will likely get a full charge in 4-7 hours, depending on battery level. Plugging in overnight seems to be the best way to keep your car ready to go for a daily driver. It is true that a Tesla could also be plugged in with a regular extension cord and an adapter, but the Home Charger gets the job done quicker.
To buy a Home charger outright will cost you $550 from Tesla. However, this system requires 240 volts, like what a dryer, welder, or RV hookup uses. The catch is not every home is wired for 240 volts. This requires an electrician to plumb in the right wiring to make it functional and safe. That is an extra cost that people might not think about before purchasing. If 240V is available, then an outlet adapter is required or there is a way to permanently install the charger. This permanent install requires some know-how or may require a visit from your electrician to make sure it’s done correctly, safely, and neatly.
So, to recap, the Home Charger costs $550, which is a pretty spendy purchase. Unless you are able to do some home electrical work properly, tack on another thousand dollars at least in order to get an electrician started, so this job might end up costing about $2000.
Cost Of Fuelling Up And Charging Up
The price of gasoline is ever-changing due to taxes, supply and demand, politics, and regional market influences. This can make the price of filling up quite painful while also limiting how much we drive. Below we will go through some calculations to compare the energy costs of a Mazda 3 and the Tesla 3. All data used is available online for free and the referenced sources are mentioned.
The Mazda 3 is equipped with a 13.2-gallon fuel tank, which means a tank of gas costs about $41 depending on when and where the fuel was purchased. The Mazda 3 gets about 28 miles per gallon in town and up to 36 on the highway, which averages to about 32 mpg.
According to the U.S. Energy Information Administration’s website, the average price of gasoline was $3.09 per gallon. While the number of driving changes per person, the U.S. Department of Transportation Federal Highway Administration estimates Americans average about 1200 miles of travel per month. That means, using these numbers, the Mazda 3 uses about 37.5 gallons per month costing $115.88 per month in fuel.
Let’s compare that to what it costs to charge up the Tesla. So we already know to install the Home Charger is going to cost at least $550 and since we can’t accurately account for installation costs, we will just forego them and use the $550. To pay that off in a year costs $45.83 per month, assuming no repairs or replacements are needed.
The Tesla Model 3 can go between 272 to 358 miles on a charge, so about 315 on average. Sticking with the 1200 miles per month statistic from above, the Model 3 would need to be fully recharged about 4 times per month.
In the U. S., the average cost of electricity is $0.1042 per kilowatt-hour. According to Tesla’s web page about the Home Charger, it states that the maximum charge rate for a Model 3 is 7.7 kilowatts and Home Charger would take about 8 hours to fully charge. This equals 61.6-kilowatt hours to charge, costing $6.42 per charge or $25.68 per month.
In summary, the Mazda 3 costs $115.88 per month in fuel. The Tesla costs $71.51 for the first year (including paying off the charger), but then would only cost $25.68 per month in electricity. This is a significant difference that only grows exponentially when comparing costs per year and costs over the life of the vehicle.
Driving any car causes some wear and tear and that warrants maintenance and upkeep. There are different types of maintenance, from general preventative maintenance, cosmetic and miscellaneous upkeep, as well as repair costs. Getting these services done on your vehicle will preserve the functionality and the value of the vehicle down the line and often doesn’t require much to do.
Preventative maintenance includes services such as oil changes, tire rotation, fluid checks and fills, inspections, lubricating certain components, and so on. Since the 2021 model is brand new, there is not any real data we can go off of. To create an estimation of maintenance costs, we need to make some assumptions based on older models. According to Edmunds.com, the estimated maintenance costs for a 2018 model year is $5,016 over five years, so an average of about $1,000 per year.
Repairs come in all shapes and sizes. Anything from replacing a burned light bulb to replacing an entire front body clip to rebuilding engines. Likewise, as accidents occur, repairs are required unless it is a total loss. Edmunds.com suggests that the 5 year total for repairs on the 2018 model is $2,266, or about $450 per year. However, both maintenance costs and repair costs increase as the vehicle gets older, so beyond 5 years, we can expect higher costs. But for now, we will total the maintenance and repair costs per year at around $1,450. Overall, this is not a bad price, it’s about 6.7% of the initial purchase price on average.
Now, to compare that to the Tesla 3. Maintenance on a Tesla is obviously different as there is no engine to change the oil on, no oil or air filter, and so on. Tesla recommends changing the cabin air filter every 2 years, the HEPA air filter every 3 years, rotating tires every 6250 miles, servicing the brakes yearly, and servicing the AC system every 6 years. So already, without knowing any costs, there is much less servicing to be done per year on the Tesla.
Unfortunately, there isn’t much data on how much these services cost. We should probably expect even fewer data as Tesla has switched from a regular maintenance schedule to an “as-needed” approach. According to an article from motor1.com, an estimated 5-year cost comes out to $1,410, which averages at $282 per year or 0.6% of the purchase price. Not surprisingly, this is much less than the Mazda 3.
This maintenance cost is definitely desirable. However, there is a catch. For the best service, the work should be done at a Tesla service center. So far, these are only located in highly-populated cities and are spread thin across the U.S. That means there’s a serious time commitment to taking your Tesla in for service. This is true for repairs, as well. Tesla owns the market for replacement parts. It isn’t likely that the local parts stores or salvage yards will be carrying Tesla parts.
So if anything breaks on your car, Tesla will build the part and install it and charge you as much as they seem fit. So, while we can’t account for that per year, a seemingly minor repair could cost much more than something the Mazda might have.
Depreciation is historically associated with vehicle prices. Brand new vehicles immediately begin to lose value as they are driven off the lot and there isn’t much to do to regain that price. Sure, restored vintage collectible vehicles might appreciate in value, but these types of vehicles are rare, hence their value.
To compare our Mazda and Tesla, in order to keep some semblance of consistency, we will use the 1200 mile per month estimate from the Cost of Fuel section, which equals 14,400 per year. Caredge.com has a interesting calculator used to calculate depreciation with inputs for the age of the vehicle, purchase price, years to own the vehicle, and miles are driven per year.
Looking at the Mazda, if we assume it’s a brand new vehicle, the MSRP listed above ($21,645), plan to own it for 5 years and drive 13,500 miles per year (the closest to our 14,400 miles), the calculator can show us some interesting information. It appears that in the 5th year of the vehicle’s life, it will reach 50% depreciation, or about $10,822. The biggest drop in that time frame is years 3 to 5 where it loses about $5,000 or close to a quarter of the original price. After that, from 6-10 years old, the price really plummets and it ends up being worth about $5,000 at 10 years old.
Overall, this isn’t a terrible depreciation rate. For a sporty sedan, it actually holds up decently well. Other sedans, like certain BMW and Audi models, drop significantly in the first 5 years.
As for Tesla, using the same assumptions as we used for the Mazda, it will drop about 44% in 5 years or will be worth about $23,336. From there, the price doesn’t drop off as steeply as the Mazda. An estimated 10-year value for Tesla is about $11,995 or about 28% of the original price.
For a car in general, this is a pretty good depreciation rate. It tracks a bit ahead of the Mazda and does better than other electric cars, too. For example, the Nissan Leaf has horrible depreciation, dropping almost 70% in the first 5 years.
But putting other vehicles aside, Mazda and Tesla have fairly similar depreciation rates. Of course, the info described here is quite generalized and hypothetical. Actual depreciation on individual vehicles depends on driving conditions, maintenance, and regional sales supply and demand.
Which Is The Better Deal?
Looking at what will be a better deal depends on several factors. Can you make the payments? How long will you own the vehicle? How much will you drive it? These and many more questions change the individual decision.
But looking at the “case” as it’s laid out in this article, assuming a 6-year auto loan, the monthly payments for the Tesla are about $600 and for the Mazda, payments are $300. That equals $7,190 and $3607 respectively.
Where the savings are going to come from is charging costs and maintenance costs. In the first year, charging will cost $858.12 to account for the cost of the charger. After that, the Tesla will cost $308.16 to charge. The Mazda will cost $1,390.56 in fuel per year. So in the first year, Tesla saves $532.44 and then $1,082.40 every year after. In maintenance costs, the Tesla only costs about $282 per year while the Mazda costs $1,450 per year. That’s a difference of $1,168 per year. If we put them together, in the first year, Tesla saves $1,700.44. After that, it saves even more at $2,250.40 per year.
So we have a Tesla payment of $7190 per year. But the first year we pay for that $550 home charger, equalling $7,740. or $645 per month. Savings on fuel and maintenance per year equal $2,250. That boils down to $5,490 the first year, or $457.50 per month. After that, we’re looking at $4,940 per year or about $412 per month averaged.
The Mazda payment is $3,607 but we are paying $1390 in fuel and $1,450 in maintenance, equalling $6,447 per year or $537 per month averaged.
So, it would appear that even after paying for a home charger, the Tesla shakes out to be the lower payment overall during the 6 year loan period. Depreciation doesn’t make a drastic change, but Tesla still did a bit better. However, the biggest deciding factor when looking to buy is the initial purchase price. Unless you have some serious cash ready for a down payment, it might be difficult to get a lender for that $43,000. The $21,000 might even be a stretch for a brand new Mazda. Either way, Tesla ends up costing less and saving more.