There are multiple ways a Tesla can save you money. From curbing gasoline dependency and capitalizing on various Tesla-only tax incentives, numerous cash-saving loopholes are available to Tesla and EV owners alike.
However, the different incentives and money-saving opportunities can be overwhelming, especially for first-time EV owners. But it doesn’t have to be. Here, we have compiled an overview of some of the cost-saving opportunities and incentives that are available to Tesla owners today.
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Charging Your Tesla vs. Spending at the Pump
The cost of charging your Tesla will depend on a few factors, including the model, the size of your battery, the charger you are using, and your charging habits. Based on the U.S. national average, the price of electricity per kWh is $0.14 while the average cost per gallon of gas is $2.51.
Click the arrows at the bottom of each table to see where your state stacks up
At these rates, a gas-powered car with a fuel tank capacity of 15 gallons would cost $37.65 while a Tesla with a battery capacity of 40 kWh would cost $5.60. Charging a Tesla could save roughly $32 compared to fueling a gas-powered car. If the average driver fueled or charged their vehicle twice per month, this would equal a monthly savings of $64. Over five years, charging an EV could save drivers upwards of $3,800.
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Cash Incentives and Tax Credits
State and local cash incentives and tax credits are a great way to make back some money after purchasing a Tesla. Cash incentives typically come in the form of a rebate from owning an EV or solar panel. At one time, EV owners even benefited from a federal cash incentive to purchase electric vehicles, but unfortunately this is no longer an option.
Depending on where you live, you can find some great cash incentives at the state level. For example, California residents can benefit from the Clean Vehicle Rebate Project, allowing them to receive up to $2,000 after purchasing an EV. California residents could also receive an additional rebate between $4,500 - $5,000 through the same program.
Local utility companies may also offer incentives or rebates. Electric companies want your business and they are often willing to provide financial compensation to switch to an EV. These rebates vary from company to company, but some power companies offer up to $800, such as the PG&E rebate in California.
Based on the above calculations, we are up to a total initial savings of $4,000, however this could be greater depending on your qualification for income-based cash incentives/grants and electric utility rebates for moving from an ICE to an EV.
Tesla-Specific Insurance Discounts
Tesla insurance helps lower the cost of ownership for new and existing customers through competitive prices. Insuring an EV through a typical auto insurance company tends to cost more than a gas-powered vehicle. To combat these higher rates, Tesla offers auto insurance at a 20-30% cheaper rate, saving drivers an average of $500 per year.
However, this program is currently available to California residents. If you’re paying more than you’d like to insure your Tesla, consider checking out Tesla’s insurance options.
If you do opt for Tesla-specific insurance, you could save anwhere from $1,500 to $2,500 over a five-year period of ownership. Not too shabby, so let's add it to the list and keep on going.
Third-Party Services
There are many third-party services that can help increase EV cost savings. On average, California residents pay 18.31 cents/kWh for electricity, resulting in an average monthly electric bill of $101.49. However, time-of-use customers whose rates change throughout the day can reduce their costs from 48 cents/kWh to 17 cents/kWh by only charging during off-peak times.
The free Optiwatt app can help you keep track of your electricity rates and automatically schedule your Tesla to charge during when rates are the cheapest, saving users an average of 70% on their electricity bill. For California residents, these savings add up to approximately $4,200 over a five-year period.
Tesla Savings vs. Cost
A commonly asked question is “can a Tesla pay for itself?” Unfortunately, for a Tesla to fully pay for itself would take a long time. However, Tesla owners can still save a significant amount from investing in a Tesla vehicle. For base models without any upgrades, Teslas cost around $40-45,000. With upgrades, these prices increase to between $57-$99,000 depending on the model. This is a substantial increase from what it costs to make a Tesla, with the average construction costing as low as $28,000.
Taking the base price into consideration, Tesla drivers could save an average of $13,000 within the first five years of ownership. This amount takes into account gas savings from fuel-powered vehicles, EV insurance discounts through Tesla, third-party apps and other incentives. Unfortunately, these savings are not enough to cover the Tesla MSRP price tag. Even if these savings were extended over the first 15 years, they would only be able to cover around 74% of the sticker price. However, they are still an excellent takeaway, especially for drivers looking to switch to an EV.
Final Words
At the end of the day, you will likely end up saving money by owning a Tesla. Fuel savings alone can be immense, especially with recent gas prices exceeding an average of $4 per gallon. The average Tesla owner also spends only $282 per year on maintenance, which is significantly lower than most gas-powered vehicles. While a Tesla may not pay for itself entirely, purchasing a Tesla is still a smart investment.
