Tesla Model 3 Economics Compared to an Average Australian Petrol Car

Pete Petrovsky 26 Nov 2021

One of the comments that gets the most eyebrow-raising reactions when talking about Tesla cars, is the fact that, for most owners, a Model 3 works out considerably cheaper than an average Australian car. Although some people are beginning to understand that an electric vehicle (EV) is less expensive to run than an internal combustion engine (ICE) vehicle equivalent, it’s hard to come across a non-EV owner who isn’t surprised to learn that, if all major costs associated with owning a car are included, a Model 3 Rear Wheel Drive (formerly known as the Standard Range Plus) works out thousands of dollars cheaper over just a short three-year period of ownership.

I like to explain this with a second-person hypothetical. Let’s assume that you decide to buy a Model 3 Rear Wheel Drive (RWD) today and your neighbour also buys a vehicle on the same day, but instead they choose an average Australian car, something along the lines of an average Ford, Toyota, Volkswagen, Nissan, Subaru, Honda or similar. The longer the ownership period the more favourable the outcome for the Model 3, and even thought the average Australian car is more than 10 and a half years old, let’s assume that both you and your neighbour sell your cars after just three years. If we take into account all significant costs, including the upfront drive away cost, a.k.a. the sticker price, and if we include depreciation, fuel costs, maintenance, insurance as well as registration and licencing fees, after all is said and done, you will be left with almost $14,000 more in your bank account than your neighbour who bought the average Australian petrol or diesel car. That’s a substantial amount of money, it’s enough to buy a second new car. Many people are either astounded by this or they simply don’t believe the figures. I have therefore provided a summary table of my calculations, below.

Tesla Model 3 RWD versus average ICE car total cost of ownership table

As with all calculations, the devil is often in the detail and assumptions can make or break even the most robust models. Where possible, I have therefore, tried to only use robust figures from reputable sources which I can readily substantiate. For example, as the Model 3 has only been in Australia for a little over two years and with the current resale values being elevated by unique market dynamics stemming from the Covid-19 pandemic, I have based the depreciation rates on the iSeeCars.com study which analysed 5.7 million new cars bought in the united states between January and June of 2017 and 1.2 million cars from the same model year sold between January and June in 2020. I have tested the model to the sensitivity of the inputs and, interestingly, even if we were to halve the depreciation rate used for the Model 3, while keeping the depreciation rate for the average ICE car unchanged, the Tesla would still come out more than $7,000 ahead.

I have also used Australian unleaded petrol prices averaged over a 10-year period from 2011 to 2020 inclusive, however, rather than using average Australian electricity prices for the same period, I have simply used the latest (and also the highest) average Australian tariffs even though, as most electric vehicle owners know, there are several EV friendly tariff plans available to EV owners. Furthermore, as is the case with many EV owners, the cars can be charged using electricity produced by solar photovoltaic (PV) systems. Once the solar PV system has paid for itself, it can effectively provide free electricity for its owners who mostly either charge at home or at convenient destination chargers such as those located in shopping centres which are generally complimentary. It is, therefore, not impossible to fuel an EV at virtually zero cost.

For the servicing and maintenance costs, I have used prices sourced directly from Tesla, but I have used average logbook service costs which include capped-price service schemes as well as prices taken from lower-cost third-party service centres. For more information, please see the video below which reveals that the Model 3 costs about a third as much to service over a 5-year period than the cost of a single service for an average Australian car. In other words, it costs less to service the Model 3 over a three-year period than an average Australian internal combustion engine (ICE) car over six months.

Although, I have been conservative with the inputs in the calculations, with the Model 3 RWD (nee SR+) starting at a drive-away price of $63,626 as an average across all the states in Australia, versus approximately $40,912 for an average new Australian car, one could argue the analysis ignores the additional finance costs. As the table below shows, however, even after factoring in finance costs, the Model 3 still comes in $12,617 ahead of an average Australian internal combustion engine car.

Total cost of ownership comparison table

Whether it’s $12,617 or $13,679, either way, it is a relatively large sum of money, as I have mentioned, it’s enough to pay for a second new car, but amazingly this is not where the savings stop. You may have noticed, there is one category, namely insurance, where the Model 3 is more expensive. That said, while insuring a Tesla may be more expensive in absolute terms, mainly due to the higher car value, personally, I have found the premiums cheaper relative to the insured value of the vehicle and the Australian average figures seem to be roughly on par in this respect with the annual premiums accounting for between 3–4% of both of the cars’ drive-away price.

Interestingly, however, this is one of the areas where Tesla continues to innovate. Two years ago, Tesla introduced its own insurance product in California, named Tesla Insurance. As Tesla begins to slowly roll out the product across other US states, the company is pairing the policies with its Safety Score telematics which, as the name suggests, provide the driver with a safety score based on their driving behaviour which is designed to statistically predict the likelihood of a future collision. Tesla bases the monthly insurance premiums on each driver’s Safety Score, and as the score changes the insurance premiums also change from month to month. Tesla calls this Real-Time Insurance. Naturally, the higher the safety score the lower the premiums. For example, there can be more than a 56% premium discount based on a 98% versus an 88% Safety Score. It remains to be seen when Tesla introduces the Safety Score to Australia or when Tesla enters the Australian car insurance market but when it does it will make the economics of the Model 3 even more compelling not only for new owners but also for existing ones.

The only other area where a Tesla Model 3 is more expensive than an average internal combustion engine or ICE car is the upfront cost or the sticker price. This is where state and federal governments should play their part, it’s crazy that we’re still subsidising fossil fuels while taxing electric vehicles.

Model 3 RWD on-road taxes, fees and chargers by state in Australia

That said, Tesla is working on a US$25,000 model commonly referred to as the ‘Model 2’ but Elon Musk has already confirmed this won’t be the car’s name, perhaps it may end up being named the ‘Model A’. Once it is unveiled and when it eventually goes on sale in Australia, it may retail below or roughly at around the price of an average petrol or diesel car thereby not only putting the economics of an entry-level Tesla even further beyond any question, but it will inevitably become the final death blow to the internal combustion engine as a means of powering a daily commuter.

It is fairly amazing that the Model 3 has economics which are superior to an average Australian car because implicit is the assumption that the two are a like-for-like comparison when, in reality, nothing could be further from the truth.

The fact is that a Tesla Model 3 is superior to an average internal combustion engine vehicle in pretty much all aspects including:

Furthermore, unlike most cars which are the best they will ever be the day they are driven off the dealership lot, the Model 3 continually improves via mostly free over-the-air (OTA) software updates.

The impressive yet not exhaustive list below outlines just some of the additional features which have been added to my Model 3 since I bought it a little over two years ago:

  • a boost of approximately 5km more range,
  • approximately 5% more power,
  • single pedal driving,
  • dog mode,
  • camp mode,
  • side camera video feeds,
  • Netflix,
  • YouTube,
  • a long list of new voice commands including voice keyboard,
  • ability to have incoming SMS messages read out and the ability to dictate a response,
  • driving visualisation updates including displaying humans, stop signs, traffic lights and even objects such as traffic cones or witches hats, rubbish bins, traffic barriers and so on,
  • automatically save dashcam footage on honk,
  • ‘Caraoke’ and a raft of new video games,
  • driver profiles,
  • ability to adjust the charging rate via the app,
  • app customisation,
  • car-wash mode,
  • Smart Summon which enables the car to drive itself from up to 50–60 metres away in a car park,
  • and a raft of driver assistance and Autopilot improvements such as the ability to monitor the speed of traffic in surrounding lanes and, if required, overtake other cars. The car can also stop on traffic lights, stop signs, roundabouts and so on.

These are just some of the additional features added over the last 2 years, but it doesn’t stop there, as innovation and improvement seem to be a continual ongoing process at Tesla. There are many new exciting updates on their way including the Full Self-Driving (FSD) capability beta button, the Safety Score beta, the FSD subscription service, the ability to detect wet road conditions, remote live sentry view, in-car purchases and these are just some of the upcoming features we currently know about. I’m sure there are dozens of more improvements in the pipeline which we are yet to find out about.

Furthermore, this is just what I either happened to notice or read about in the software release notes, but the car has also been improving its already unmatched safety with undocumented updates like safer airbag deployments adjusting for occupants’ weight and seating position. In other words, the airbags now adjust when, how fast and in what direction they deploy depending on where on the seat the driver is sitting. The algorithm also considers the pressure distribution on the car seat to determine if the passenger is a baby, a toddler or an adult and it even tries to calculate the probability of a person’s gender.

In addition to the over-the-air updates, the cars are equipped with all the hardware necessary to enable full self-driving (FSD) in the not-too-distant future. One could argue that this makes the cars themselves but perhaps also the economics largely future proof. Perhaps this and the potential that FSD may one day be worth US$100,000 is an important factor contributing to the Model 3 showing a depreciation rate that is 25% lower than an average car.

Does this mean that a Model 3 or a Tesla for that matter is the right EV or even the right car for everyone and for every situation? No, of course not, but taking into account FSD improvements, in the majority of situations, the Model 3 and Model Y superiority, not only in economic terms but also in terms of both the quantitative and the qualitative value they offer their owners, makes one wonder if we haven’t already reached the point which Elon Musk referred to when he compared driving anything other than a Tesla to owning a horse or as he further elaborated, it is “financially insane to buy anything other than a Tesla”.

Pete Petrovsky

Pete Petrovsky is an active TOCWA (Tesla Owners Club of Western Australia) committee member and a long-time EV enthusiast. He placed a $6,000 deposit for a Model X (#39) in 2014 but when it came to taking delivery he couldn’t justify the cost, so instead, he and his wife decided to buy two PHEVs and wait for the Model 3. In March of 2016 they bought the Holden Volt and a couple of weeks later the Mitsubishi Outlander PHEV, and on the day it was unveiled, Pete ordered the Model 3. After selling the Outlander, in September 2019, Pete took delivery of the Model 3 and despite still loving their Volt, Pete and his wife are now looking forward to ordering the Model Y as soon as it becomes available in Australia.

When he gets time, Pete posts videos on his ‘Tesla Ahead of the Curve’ YouTube channel. He is a long-term Tesla shareholder and over the last eleven years has been responsible for more commercial rooftop solar PV in Perth than any other individual. In 2016 Pete added grid electricity to his role and since October 2020 he has been Managing Director of Imppact Energy Consultancy. In July of 2011, Pete also installed one of the first ‘oversized’ 6KW solar PV systems in Perth, which to this day continues to power their home and both EVs with free sustainable energy.

100% a Waste of Time: Why charging to 100% is defeating the purpose of Superchargers

Pete Petrovsky 21/10/2021

Supercharging Karrinyup

As most EV owners will know, there are two main ways to charge an EV, AC or DC, but there’s also another less known and slightly more nuanced distinction.

A charger’s main purpose can be for rapid top ups or for longer perhaps even overnight charging and it’s important for EV drivers to understand this difference as it will not only save a lot of time, but it will also result in a better ownership experience for the entire EV community.

The main purpose of ultra-rapid DC chargers such as the Tesla Superchargers is rapid top-ups to facilitate convenient travel between built-up areas. This is critical in winning over the broader driving public who have concerns about charging downtime on long trips away from home. The problem is many new owners have misunderstood this and are in fact wasting a lot of their time charging at high battery percentages. How much time are they wasting? It depends on the vehicle’s next destination but as can be seen from the graphics below, it’s more than many drivers realise.

Test conducted with a Tesla Model 3 Performance charging from a V3 Tesla Supercharger at a 14-degree outside temperature with a pre-conditioned battery.

As the chart above shows, a long-range battery takes about the same time, roughly 14 minutes, to charge from 10% to 60% as it does to charge from 90 to 100%. In other words, you can spend the same 14 minutes topping up 50% at a lower state of charge (SoC) or 10% at a higher SoC. 

50-60% SoC is a key level because not only does the time to charge each 5% increment begin to lengthen to charging speeds attainable at slower (non-ultra-rapid) DC chargers but generally it’s enough battery capacity to cover the distance between Superchargers on long road trips.

What is not illustrated on the graph is what happens once the state of charge reaches 100%. Once at 100%, the charge time jumps off the chart as it took me at least a further 19 minutes of trickle charging the last few watt hours and balancing the cells before I lost patience and quit the test.

TezLab power chart.

As can be seen in the graphic above, at roughly around a 14% state of charge (SoC) the car reached its peak charge of 244kW but then this began to taper off down to 192kW at 30% SoC, then to 110kW at 50%, 81kW at 70% and 42kW at 90% before dwindling down to 5kW once it remained at 100% for almost 20 minutes.

Once at 100%, the time the car takes to completely finish charging is dependent on how long it has been since the battery was fully charged to 100%. The longer the period between full charges the longer it takes to balance the cell groups and the longer the battery takes its time at the 100% level.

Powered by a lithium-nickel-cobalt-aluminium (NCA) battery chemistry, once at 90% or above, it is best to begin driving the Model 3 Performance (and Long Range) to ensure minimum long-term battery degradation. It’s not ideal to keep this chemistry above 90% or below 20% for extended periods of time. In fact, the above 90% charge level should be reserved only for times, when necessary, on longer stretches between chargers on country road trips. However, that said, it is also a good idea to balance the cells once every 3-6 months. The added benefit is that the battery management system (BMS) will also get a chance to recalibrate itself to ensure accurate battery range readings.

In contrast, it is ideal to charge the lithium-iron-phosphate (LFP) battery chemistries, found in the Shanghai built and soon also in the Fremont built Standard Range Plus Model 3s, to 100% at least once a week and it’s also perfectly fine to charge to 100% on a daily basis.

Irrespective of the battery chemistry, however, to save wasting your time at Superchargers and unnecessarily taking up this important infrastructure, please be mindful of how busy the charger is. If you feel the need to charge to 100% and if you have plenty of time, during off-peak times when Superchargers are hardly used, it is perfectly fine to squeeze in every last watt but at busy times, vehicles taking up much needed charge bays while charging at a fifth or less of the charger’s potential is a burden on the infrastructure and not helpful to fellow EV owners.

243kW charge rate.

Therefore, please consider only charging to a lower percentage and leaving the charging at the top state of charge levels for your home, BNB, or at overnight AC destination chargers such as those allocated to your room at hotels and EV-friendly resorts. You’ll only be doing yourself, your EV community and even potential new EV owners a big favour.

P.S. Special thanks to TOCWA Chairman Rob Dean for not only helping with this article but also for coming up with the idea for the test.

Jurien Bay DC charger critical instructions

Due to a redevelopment of the Jurien Bay foreshore the “plan B” 3 phase outlet has been removed making the 50kw DC charger at Caltex even more important for those looking for a short stop on the trip between Perth and Geraldton. There is a Tesla destination charger at the tourist park but this is limited to 3.6kw so is only useful for an overnight stop.

If Perth to Geraldton is only 410kms via the coastal road do I need to stop? In most cases, absolutely yes, due to the nature of the road surface and almost constant winds it’s near impossible to achieve reasonable energy efficiency, driving at slower speeds on this busy road and being a road hazard is not an option so it’s best to accept the inevitable and plan a 25 to 40 minute stop at Jurien Caltex while adding 20-40% back to the battery. 

The most critical aspects to using the Jurien Bay DC charger is to carefully read the operating instructions on Plugshare before arrival, patience is front and centre at this location, if you try and rush the process or miss a step you’ll just waste time. The Tritium DC charger is very reliable, the only time it’s failed to work is due to an issue with a handful of pre 2020 model X or S cars with a CCS2 upgrade or the operator rushing the start up process. If your Tesla is less than 24 months old, you should not have any issues with this charger.

A few tips:

Phone ahead your arrival time, Wade or Jarryd will make an effort to be on site as they know the process better than other staff members.

Make sure when the charger is unlocked both charging handles are firmly pushed into the holsters before and while the charger completes its 5 minute start up process.

Don’t arrive at this charger with less than 50kms of range, even though it’s so far been extremely reliable there is no longer a plan B in town, keep enough spare range to drive the 24kms to the Cervantes destination charger.

Don’t complain about the price, 70 cents per kWh and a $25 minimum may appear high but the Electric vehicle owner that spent tens of thousands of dollars installing the Jurien Bay unit will never see a return on investment.

Planning a long distance trip away from DC chargers

If you’re keen to drive you’re Tesla north of Geraldton or east past Merredin it can be done safely as long as you have patience and prepare correctly. If you treat the journey as an adventure you’ll enjoy the trip, treat it as a task that needs to be completed ASAP and you’ll wish you stayed at home.

What will you need to carry?

You don’t need a large variety of charging cables but you do need charging plans A, B and C.

  • Plan A is the Tesla destination chargers located around the state, so far most of these have been reliable and most also have a 5 pin three phase outlet nearby as a backup.
  • Plan B is a 3 phase mobile connector such as a juice booster or KHONS charging cable that plugs into the dozens of 3 phase 5 pin outlets located all over Western Australia, this will generally provide the same charging speed as a Tesla 3 phase destination charger. Unless you’re planning many long distance trips I suggest you borrow a KHONS cable from TOCWA, paying over $800 for a cable you may only use a handful of times is not good value.
  • Plan C is the UMC that is delivered with the car, it’s the one in the square black bag. You may never use this cable but you must carry it, if everything else fails this will get you home, slowly but eventually.

North of Geraldton and east of Kalgoorlie you’ll need a spare tyre, jack and associated equipment. Puncture repair kits are a handy plan B but won’t get you out of trouble if the tyre damage is severe, besides you don’t want to be hanging around some outback town for 3 days while a spare tyre gets transported in. Keep in mind the best way to reduce tyre issues on a long trip is depart home with plenty of tread depth. A spare tyre and wheel combo is available to loan from TOCWA.

The Plugshare app is critical, make sure all fields are open so you don’t miss any charging options. Before departing to the next charging location it’s important you read not just the  location details but also previous comments, this may well save you a lot of time and frustration on arrival. Don’t forget to log in and if necessary leave a tip for the following drivers, it’s a great way to support the EV community.

Charging tips.

At some stage in the future virtually all locations in Western Australia will have fast DC charging until then the following tips will make any trip far easier.

  • Charging from AC will provide the same power transfer and charging speed no matter the battery state of charge right up to approximately 97% so there’s no time saving in adding the bare minimum charge to get to the next location, this is where the saying “Always Be Charging” comes in, take the charge where its available, the next charge location may only be 200kms along the highway but if it doesn’t work you could be spending the next 15 hours charging from a caravan park socket rather than the lunchtime stop you expected. Arriving with 40% state of charge is far wiser than arriving with less than 10%.
  • Don’t try and charge too fast if you don’t need to, especially overnight on three phase. If the Plugshare comments say the breaker trips off with extended high amp charging go to the touchscreen settings and drop the amps down a small amount so the car completes charging just before you plan to depart, slower charging is better than no charging.
  • Cool the car interior just before departure while still charging, this reduces the energy consumption from the battery needed to cool the car down once back on the highway.
  • Ask permission to charge before you plug in. Many of the charge locations in regional WA are provided through the good will of the local business, it’s important to return the favour with a friendly chat if possible. Take note that due to staff turnover the person behind the counter may not even know a chargepoint exists, check the exact location by browsing the plugshare photos beforehand.

General tips.

Get an early start each day and get off the road before dark – there’s far less traffic on the road in the early morning and it’s generally cooler. There’s still some wildlife hanging around the side of the road but it’s easier to see without a continual flow of headlights heading towards you. Early starts and early finish also provide some flexibility if your planned journey for the day takes longer than expected.

Don’t get too confident in quality accommodation being easily accessible, if you want the best possible overnight stay, ring well in advance, and make sure you arrange key collection. Many of the regional locations close up the front office by 6.00pm.

A number of TOCWA’s committee and members have completed long distance journeys throughout the state as well as around Australia, they are willing to share their experience with others so don’t be afraid to ask if you want more information.

Avoid switching off the air conditioner to save energy.

I’ve noticed a lot of drivers recently tell how they turn off the air conditioner to gain extra range, this stems from a misunderstanding of how much energy a Tesla HVAC system (Heating, Ventilation and Air Conditioner) consumes under various conditions. It’s only if you’re driving in areas north of Geraldton or east of Merredin that you should be concerned with energy consumption (or if you’re paying insanely high electricity prices). In the city and suburbs crank up the cooling or heating and enjoy that car.

As virtually all country areas in Western Australia that may require some energy conservation are warmer areas, I’ll stick to discussing HVAC cooling.

So why not turn off the HVAC cooling or open the windows?

Driving an aerodynamic vehicle with the windows open above 40-50kmh is a backward step, more energy will be consumed from poor aerodynamics than an air conditioner would normally consume, the faster you drive the bigger the difference.

Driving a long distance in a car with a hot interior is not worth it unless the situation is desperate, besides the safety risk of possibly losing concentration, you’re also reducing the enjoyment of driving a Tesla.

When cooling the amount of energy the HVAC consumes depends on a couple of factors; how low a temperature the HVAC is set too, the interior and outside air temperature and often lastly but often overlooked; how long the car has been sitting in the full sun before switching on the HVAC, a significant part of the heat absorbed by the cars bodywork will transfer through to the interior adding to the task of cooling the inside air.

How to get the best range while still using the HVAC cooling.

  • Try and park the car under shade before departure, this could save 10-15kms of range over a 350km trip.
  • Pre cool the interior whilst the car is still charging, on AC charging this may reduce the charge speed but getting extra distance covered is more important than the few extra minutes it may take.
  • Set the thermostat higher, you may enjoy being spoilt with a 20C interior around the city but 23C over a long drive is better than no cooling at all.
  • Drop 5kmh- If the choice is drive at 100kmh with no HVAC cooling or 95kmh with cooling the 95kmh journey is going to be far more enjoyable, besides driving at 95kmh only makes the 350km trip 11 minutes slower.

Over the long term as DC fast chargers are installed in WA country areas reducing most trips to below 250kms the above advice will no longer be applicable, but in the meantime stay cool and enjoy that car.

Tesla Destination Charger Problem Solving

On occasions you’ll plug into a destination charger that doesn’t appear to work, a small number of these public chargers are becoming unreliable mostly due to the cable getting mistreated, to add some confusion the same charger will not work for one car and then work first time for the following car on the same day, the Williams Woolshed destination charger is a great example.

To make the Tesla experience a bit easier here are the steps to work through that will hopefully get a Tesla destination unit to charge:

If there’s no Green or Red light strip light on the front check that power is switched on at the meter box, some premises keep it switched off for various reason, this will be often noted on the Plugshare app.

If you’ve established that the unit is powered up but a Red light is showing check that the cable is not twisted or stretched in any form, also check the cable is not pulled out from the bottom of the charging unit, that is you can see each individual colored cable rather than the black insulation.

Once the above steps are done locate the Red reset button on the side of the unit, using your thumb press it in and hold until all lights go off and wait until the Red/Orange light on the front turns Green, this will take between 5 and 30 seconds, if all goes to plan the Green light will start moving and the car will charge. If it doesn’t work the first time give it another go, also try unplugging and plugging back in before attempting a third reset, once again make sure the cable is not unduly stressed. If the charging doesn’t start after 4 resets the chances of it working at all on your car are very low.

If you do get charging started don’t rush off, hang around for a minute until the cars charging at full amps, if the unit has a fault it is likely to trip off within the first minute, if it does trip off it’s best to no longer attempt charging and report the issue. If you have no other choice and desperately need to charge try dropping the amps down via the cars touchscreen, keep in mind this is an absolute last resort. As an extra precaution if you walk away from the car to visit the shops or cafe check the phone app after 15 minutes, it’s very likely charging is still okay but there’s no harm making sure.