Much has been made about the idea that people would refuse to buy cars made by Tesla Motors Inc (NASDAQ:TSLA) because of concerns about range anxiety on roadtrips. Setting aside the fact that most people with enough money to purchase a
Tesla Motors Inc (NASDAQ:TSLA) Model S also own at least one more car and are likely to fly instead, the Model S may become one of the cheapest ways to travel across long distances in the United States. After all, how many other automakers supply free fuel?
A cost comparison
Data from the U.S. Energy Information Administration finds an average electricity price of 11.92 cents per kilowatt hour. This data uses the residential charging rate, which is what the majority of
Tesla Motors Inc (NASDAQ:TSLA) owners would be using when not connected to public chargers.
Tesla Motors Inc (NASDAQ:TSLA) says the average energy consumption rate for the Model S is roughly 330 watt hours per mile. Assuming a 600 mile roadtrip (300 miles each way, a fairly reasonable drive), the Model S would consume approximately 200 kilowatt hours of electricity. Taking a 15 percent charging loss into account, it would take around 230 kilowatt hours to fully power the Model S. Using the owner’s own residential electricity, this trip would cost around $28 in total.
But this situation is unlikely to happen since the Model S range is less than 300 miles. Once more
Tesla Motors Inc (NASDAQ:TSLA) Supercharger stations (which offer free electricity to Model S owners) are installed, the owner is likely to use one of them for between a third and two thirds of the drive. Using the $28 figure above it is fairly simple to calculate how the energy cost can easily fall to less than $20.
Tesla Model S cost for 600 miles: $20 - $28
When comparing gasoline cars to
Tesla Motors Inc (NASDAQ:TSLA), many analysts make the mistake of using a mass market car as a reason to show a supposedly prohibitive cost for the Model S. Nonetheless, I will compare the Model S with two cars for a cost to drive here: The Ford Motor Company (NYSE:F) Focus (the best selling car in the world according to R.L. Polk data) and the PORSCHE AUTO ADR (OTCMKTS:POAHY) Panamera (quite likely the best available comparison to the Model S is terms of price and performance).
Data from Fueleconomy.gov shows the
Ford Motor Company (NYSE:F) Focus FWD with an automatic transmission to have fuel consumption of 27/38/31 miles per gallon and the base model
PORSCHE AUTO ADR (OTCMKTS:POAHY) Panamera to have fuel consumption of 18/27/21 miles per gallon. If we take the optimistic approach and use the highway fuel economy numbers, the 600 miles trip uses 15.8 gallons with the Focus and 22.2 gallons with the Panamera. Using AAA’s fuel price figures on Jul. 10, the Focus would cost $55.32 to drive while the Panamera would cost $85.20. (The Panamera’s fuel costs more per gallon since it uses premium gasoline while the Focus uses regular gasoline.)
Giving a variance of 10 percent in either direction to account for differences in driving results in the following numbers:
Ford Focus cost for 600 miles: $50 - $60
Porsche Panamera cost for 600 miles: $77 - $94
For trips of this length, many customers may also choose to fly. However, air travel is rarely done for cost savings and is usually done to avoid the need to drive or to reach a destination faster. But for those who do the airfare to car fuel comparison anyway, the Bureau of Transportation Statistics gives the average domestic airfare for the fourth quarter of 2012 at $374.24 roundtrip, significantly more expensive than driving. Even discount fares from carriers like Southwest Airlines rarely get to the point where roundtrip airfare would be cost competitive with driving.