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Is Tesla Cheaper than Gas?


The debate rages on–does the money saved on maintenance and gas counterbalance the cost of buying an electric vehicle (EV) and paying for the energy required to charge it?

There are countless factors to consider and we’ll cover several of them here. However, we won’t keep you in suspense. Charging a Tesla is cheaper than filling the gas tank.

Cost of Gas vs Cost of Energy

There have been countless studies outlining the costs of charging electric vehicles and the cost breakdown of burning gas. Electricity wins every time.

Speaking specifically to Tesla, the different models require different amounts of energy to charge. The difference, however, is small.

As a summary, the Model X costs about five cents per mile while the Model 3 is up to one cent less per mile.

The Tesla Model S comes in around 4.3 cents per mile and the Model Y costs about four cents. As you can see, the range is between four and five cents per mile.

These calculations are based on an average energy cost of $0.15 per kWh (in the United States). It’s also worth noting this discussion assumes a charging source at your residence. When relying on a Tesla Supercharger, you can expect to pay almost double at an estimated 26 cents per kWh.

In contrast, the price at the pump will average out to between thirteen cents and twenty cents per mile.

In short, that means a Tesla will cost you a fraction of what a gas-powered vehicle does.

Another way to think of this is that, depending on the model, it costs between $9 and $18 to fully charge your Tesla. Compare that to the cost of filling your gas-powered vehicle.

Of course, there is a broad range in these per mile estimates. The efficiency of your gas-powered vehicle is a big factor. A eight-cylinder truck from the 1960’s might only net you eight miles to the gallon while a newer sedan can push over 40 miles to the gallon.

The same can be said for Teslas and other electric cars though. In the case of Tesla, the different models have ranges from 300 to just over 400 miles. That difference in range affects the per-mile calculation in the same way as the fuel efficiency in a gas-powered vehicle (gpv).

As either type of vehicle ages, the fuel efficiency can drop slightly.

Tesla parked in front of house with solar tiles and charging gear

Cost of Fuel Source

In addition to range or miles per gallon, another factor in the equation is the fluctuation in the price of energy and gas.

The averages above can be used as generally reliable numbers for your own calculations. However, if the price of energy or gas is significantly higher or lower where you live, it can make a significant difference in the final numbers.

Sometimes, there is a marked difference in the cost of energy, but it’s typically short-term such as following a disruption in production, an increase in demand, or if there’s a problem with distribution.

If you average it over the life of a vehicle, energy costs will stay fairly consistent. However, the locality of where you live can be a huge factor in the overall cost of charging your Tesla.

According to the United States Energy Information Administration, “In 2021, the annual average retail electricity price for all types of electric utility customers ranged from 30.35¢ per kWh in Hawaii to 8.17¢ per kWh in Idaho.” That means that powering up a car in Hawaii will cost you more than three times what it does in Idaho.

Gasoline is notorious for price fluctuations, however. Think back to a few years ago, or twenty years ago. In the late eighties a gallon of gas cost less than $1.

Depending on where you live and what kind of gas you use, that same gallon will cost you more than five times as much. Over the life of your vehicle you may see substantial differences in the price of gas.

All of this is to say the numbers in the gas vs. charge costs equation are ever-changing so stick with the best-guess averages.

Solar Panels

house with Tesla solar tiles and car

There’s not much you can do to control the price of a gallon of gas. But when it comes to residential energy, investing in solar power can considerably lower your energy costs.

Of course, the location of your home matters here too, but if it makes sense as an energy source, your Tesla charging station will offer a discounted fill rate.

The generally accepted numbers provide that a solar panel system that will produce 6kW cost about $17,000. With a federal solar tax credit running around 30%, that effectively drops the cost to just over $11,000.

Spread that out over the predicted lifespan of 25 years and you’ll be paying around five cents per kWh compared to the average 15 cents the above calculations factored in.

In short, that means that even while paying for solar panels, your energy costs will be one-third of what they are from the grid.

If there’s any question about whether it’s cheaper to charge your Tesla or fill up a gas-powered rig, a solar solution erases any doubt.

Are Tesla’s Expensive to Maintain?

As your primary vehicle, Tesla’s share some of the maintenance needs of your previous vehicle. You still need to swap out the windshield wipers, inspect the brakes annually and watch the wear on the tires.

Without the moving parts of an internal combustion engine (ICE) however, the overall maintenance requirements are much lower. There are few fluids to maintain or change–such as oil and power steering fluid–and no engine filters, spark plugs, wires, water pump, alternator, or any other components of a traditional engine.

Although there are some general maintenance requirements for a Tesla, the annual expense for repairs is much lower than most other vehicles.

Estimates vary wildly in the costs associated with vehicle repair and maintenance so, again, we’re looking for averages here. If you have another vehicle you’re considering, look up the estimated repair costs for that vehicle using Consumer Reports or another reliable source.

On average, Tesla maintenance will run $300-$500 annually. This is an average based on overall and ongoing costs for a several year period.

Gpv’s, on the other hand, run around $700-$1,100 on average for repairs annually.

Life of the Vehicle

Few electric vehicles have been on the road long enough to accurately estimate their lifespan. Since there are few moving parts and no engine to blow, the assumption is they will last decades.

However, the key component of an electric vehicle is the battery setup. When the battery fails, you’ll be facing a very expensive repair.

Estimates cover a vast range for battery replacement in an EV. You might see quotes as low as $3,000 to $7,000 but this is not a realistic expectation. The average cost to replace a Tesla battery is around $13,000 and can be more than $25,000.

It’s fair to say that if a full-battery replacement is required, most owners will consider it to be the end of the car’s useful life. However, Tesla battery packs are covered under warranty for 8-10 years or 100,000-150,000 miles. Complete failure is rare and when it has happened, it’s mostly been covered within the warranty period.

Much can change in the next decade and the costs may alter substantially in the years to come.

The good news is that Tesla batteries are designed to last as long as the life of the vehicle, which could be anywhere from 150,000 to 500,000 miles. With an average annual drive rate of around 13,000 miles, your Tesla could still be on the road in 21 to 30 years from the date of purchase.

Comparatively, the average gpv lasts around 15 years on the road.

Are Electric Cars Worth it?

Tesla driving by greenery

So where are we at in our decision? It’s almost universally accepted that it’s cheaper to charge an EV than to pay at the pump. In fact, it’s over three times less expensive to power a Tesla than its gas counterpart.

Those savings add up over the life of the vehicle. While we’ve yet to establish a reliable lifespan for EVs, if we say they last nearly twice as long, those annual savings multiply.

Let’s do some math and say we drive 15,000 miles annually. At .045 cents per mile we’re looking at a Tesla charging cost of $675 annually.

The same 15,000 miles in the gas vehicle will average $1,950. The $1,275 annual savings multiplied by 20 years is $25,500. If it stretches out to 30 years we’re looking at $38,250.

That doesn’t factor in the estimated savings in maintenance at an average of around $600 (times 30 years is $18,000).

We do have to subtract the cost of installing a level 2 charging station in your home. While most cars come with a level 1 charging system, that will provide little more than a slow trickle from your home’s 110-volt outlet.

A level 2 charger will reliably charge your Tesla over an eight to ten hour period, sometimes considerably faster. However, it relies on a 240-volt outlet, which will need to be professionally installed by an electrician. It may be an easy fix by running wires a short distance from an available circuit on the control panel.

On the other end of the spectrum, an older home with a maxed out circuit breaker box will require a second circuit panel or at least the addition of a new circuit breaker and wiring to serve the need.

This outlet is similar to the type used for your dryer so it’s a designated circuit and needs to be safely installed for the purpose. You may also need to pay for permits and inspections to make sure the work meets code regulations.

The cost of adding a charging station to your home can run between $500 and $3,000.

Now, there is one cost we haven’t covered here, which is the initial expense of buying the car. Tesla’s aren’t cheap. Even the base model will cost you over $45,000. Higher-end models reach nearly $150,000.

When compared to other models in each class Teslas average around twice the amount of a comparable gas-powered car.

However, current rebates offer a considerable kickback on your purchase. The details are complicated and ever-changing. Not all electric vehicles are included in the tax credit.

There are also factors that involve your income and how much of a refund you are due. The vehicle must be assembled in the United States and meet outlined criteria for battery components and critical minerals.

If you and the vehicle qualify, the tax credit could be $7,500 as of January 2023. There may also be rebates, credits, and other incentives at the state or local level.

The answer to the question, “Are Electric Cars Worth it?” is complicated. You will need to run the numbers for your specific situation. What model of Tesla are you looking at and what is the total cost? What is the cost of electrical power and gasoline in your area? How much will it cost to install a level 2 charging station?

Answering these questions will allow you to do the math to see if it makes financial sense for you to invest in a Tesla.

However, the numbers alone won’t address whether it might be the best purchase option for you, based on your beliefs. If you’re looking for a way to reduce your carbon footprint, deciding whether it’s worth it is a pretty easy yes.

On the other hand, if you drive 200 miles to work each day, it might not be the time to buy an EV and suffer range anxiety.

These are obviously extremes, so your decision will have to be a balance between cost and preference. The truth is advocates and critics can use the ‘data’ to spin the numbers however they want. They can also make a case for or against the environment.

In the end, if you do your research and base your decision on what’s right for you, you’ll be happy with the results.

For more information check out Maintenance and Safety of Electric Vehicles and The Care and Feeding of EVs.

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