Is the Tesla Model S a Bargain?

By Eric Loveday

Eric Loveday

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Eric Loveday is a car enthusiast with a love for everything automotive. He purchased a 1970 Chevelle at age 16, quickly outgrew its dated engineering... More

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1,539 views Mar 31, 2009

2012 Tesla Model S prototype

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Tesla Motors' CEO Elon Musk argues the Model S is a bargain. Still lobbying for $350 million in federal funding, Musk pleads his case to customers and those in Washington, D.C. But do the numbers support Musk's assertion?

According to him, the Model S is a value proposition when you consider the money saved over the course of several years of ownership. The car has a base price of $57,400. Factor in the $7,500 federal tax credit and you can get it for only $49,900. Nearly 50k doesn't seem like a great deal, but there are other things to consider when you purchase an electric vehicle.

One, an electric vehicle does not require costly gasoline to run. The electricity needed to propel the Model S down the road costs the consumer considerably less than a possible future cost of gasoline in the $4 per gallon range.

Two, electric vehicles require little maintenance compared to their gasoline counterparts. There will be no more oil changes for example.

But how does one accurately compare the costs of an electric vehicle to a gasoline vehicle? The answer is that you cant. The cost of gasoline is too unpredictable to make a comparison into future costs of operation. But you can make a guess.

According to Musk, "The ownership cost of Model S, if you were to lease and then account for the much lower cost of electricity versus gasoline at a likely future cost of $4 per gallon, is similar to a gasoline car with a sticker price of about $35,000... Model S costs roughly $5 to drive 230 miles, a bargain even if gasoline were $1 per gallon."

If you believe Musk, you will certainly feel good walking off the lot with your bargain Model S, but trying to explain to others how it really only costs $35,000 may stir up some heated debate.

Source: CNET