No one sees a Tesla or a Tesla owner and thinks “budgeter” but as it turns out, the total cost of ownership of the new Model 3 is about the same as the cheapest car in America.
This is according to the astute arithmetic of Paul Fosse writing for Clean Technica, who compared the most popular EV brand’s latest offering to the internal combustion-powered 2023 Mitsubishi Mirage, the cheapest car in America.
Using “Total Cost of Ownership” (TCO) meaning all the costs of owning and operating a vehicle spanning 5 years, Fosse shows that over the mid-term, a Tesla is actually an economy class car.
For starters, the 2023 Mitsubishi Mirage lists new for $16,245, while the Model 3 is twice as much up front, which is nothing to sneeze at and is usually the only cost relavent to car buyers selecting their prefered option.
From there, Fosse uses as a five-year TCO from Edmunds.com as a baseline measurement but found that their estimates of Tesla value depreciation, taxes, financing, and trade-in value to be significantly awry.
For starters, his own deep research has shown that Tesla cars, unlike high-end luxury or performance models, don’t depreciate nearly as fast—about 4% a year (or $6,066 after 5 years). Next, he predicts that the $7,500 electric vehicle tax credit will still be available in five years, and that buying a used EV still confers a $4,000 credit, allowing retailers to sell them used for more than before.
Then Fosse adjusts the taxes and financing costs to reflect the new up-front price that’s nearly $16,500 less than shown in the Edmunds estimate.
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While the cost of insurance is about 3 grand more, Tesla 3 owners would more than make up for it with reduced fuel (a variation depending on your zip code) and maintainence costs, (Teslas have 1 moving engine component) as well as the tax credit.
His totals show that despite being significantly slower and sparser, a Mistushibi Mirage has a 5-year TCO of $31,349, just $1,000 less than a brand new Model 3 Tesla, as well 200 more grams of CO2 per mile accounting for many metric tons more ove 5 years.
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