The Toyota Camry is America’s best-selling sedan overall, but the Tesla Model 3 is the best-selling electric sedan when it comes to electric vehicles.
The Camry has a starting price of around $25,000, but the Model 3 has a starting price of around $40,000, which is substantially more than the Camry.
However, when you go beyond just the initial purchase price difference and calculate the entire all-in ownership cost, you might be surprised to find that the cost for the more expensive Model 3 is very similar to the less expensive Toyota Camry.
In this article, I’m going to show that the Tesla Model 3 truly puts a practical, luxurious, and tech-forward EV within reach of many buyers and is more affordable than I think many people realize.
Tesla’s recently released 2020 impact report claims that the Tesla Model 3 standard range plus has a very similar cost of ownership per-mile basis to the very popular but less expensive Toyota Camry.
So let’s take a closer look at the data that Tesla shared in this impact report. I will then look at some of my past research and see how this compares to some of the calculations I did about a year and a half ago.
In the 2020 impact report, Tesla said the following about product affordability. “the Model 3 is the first-ever in history priced on par with gas-powered equivalents even before taking into consideration any regional subsidies and lower running costs.
Unfortunately most other EVs on the market today are still priced at a $10,000 to $20,000 premium compared to their direct internal combustion engine vehicle equivalents.”
Tesla included this graph to illustrate their point and show that the purchase price of the Model 3 is very similar to other entry-level luxury cars like the Mercedes C-class, the BMW 3-series, and also the Audi A4.
TI think it’s important that Tesla shared this because they compared the Tesla Model 3 to other entry-level luxury vehicles. Some people may argue the Model 3 is not a luxury vehicle, but it clearly is.
It has all the features that a luxury vehicle has in this price class. For example, suppose you can afford a luxury vehicle like the Model 3 that is at least the standard range plus version.
In that case, you can afford a Toyota Camry because the ownership costs are very similar between a $40,000 Model 3 and a roughly $30,000 vehicle like the Toyota Camry. This is what’s really impressive.
To this point, Tesla goes on to say, “over five years of average driving the ownership costs of a Tesla Model 3 are roughly the same as a Toyota Camry.
The Tesla Model 3 has a base price similar to BMW 3 series, but the total cost of ownership per mile is nearly on par with America’s best selling sedan, the Toyota Camry.”
Tesla then goes on to give the exact cost estimates of driving the Tesla Model 3 standard range plus based on data they have collected from their fleet.
They say, “our analysis shows that over five years and 60,000 miles running in Model 3 standard range plus cost 55 cents per mile.
When it comes to how the running cost of the Model 3 compared to the Camry, the running costs like electricity or gasoline, maintenance, tires, and repairs for Model 3 should cost just over half of a mass-market internal combustion engine vehicle such as the Toyota Camry,
In this report, Tesla did not give the exact cost per mile of the Toyota Camry. But they did provide this chart, and if you look at the scale, it seems like Tesla found the Toyota Camry cost to be around 50 cents per mile.
If you compare this to their estimates for the Model 3, there’s about a 5 cent variance between the two vehicles’ ownership costs on a per-mile basis.
When you extrapolate this per mile cost out to the total cost for the 60,000 miles five-year period, it shows that the standard range plus cost around thirty-three thousand dollars and the Toyota Camry’s true ownership cost will be right around thirty thousand dollars.
Interestingly enough, in January of 2020, I publish an article comparing the five and ten-year true ownership costs for the Toyota Camry versus the Model 3 standard range plus.
In my calculations, the numbers that I came up with are very similar to the numbers that Tesla quoted in their comparison.
Here’s a screenshot with my calculations for the true five years or 60,000-mile ownership cost for the 2020 Tesla Model 3 standard range plus with an initial purchase price of $41,190.
And here’s a screenshot of my calculations for the 2020 Camry SE with an initial purchase cost of around twenty-eight thousand four hundred and five dollars.
As you can see, my past calculations pegged a Camry SE true cost of ownership for a five-year 60,000 mile ownership period to be about 51 cents per mile and the Model 3 standard range plus to be around 52 cents per mile.
When you compare my calculations to what Tesla presented in their impact report, I was pretty much spot on with the Camry price estimates and about 3 cents per mile off on my Model 3 estimates.
Because of this, I feel really good about these numbers that Tesla put out, and I do believe they represent reality.
When you realize that a sedan with a purchase price of around forty thousand dollars like the Tesla model three standard range plus only costs around five cents more per mile to drive than the very popular Toyota Camry.
It makes the Tesla Model 3 standard range plus look like quite a bargain and shows that even with a higher initial purchase price, the Tesla Model 3 is actually easier to afford than you might have thought.
In addition, when you think about the long-term resale value of an electric vehicle, it’s still an internal combustion engine vehicle.
As the world transitions away from gas to electric vehicles, there will be less demand. There will be fewer buyers, and thus the resale value will be lower in years to come.
On top of all this, the Tesla Model 3 can also receive over-the-air software updates and should have all the hardware necessary for full self-driving with a future software update.
These software updates and the robust hardware that Tesla includes in the Model 3 make the vehicle somewhat future-proof because they can be added when new features are available in the future.
The Model 3 also has arguably one of the best infotainment systems, only beat by the newly refreshed Tesla Model S and X.
It also has built-in security features like the dashcam recorder and sentry mode, as well as the ability to stream movies and videos from some of your favorite services like Netflix, Disney plus, Hulu and Youtube.
There are, of course, a number of other useful and helpful features in the Model 3 and Tesla’s other electric vehicles, and this list continues.
So to wrap all this up and when you take a look at the ownership cost comparisons that we’ve done, it becomes very clear which vehicle offers a better value.
Yes, the Toyota Camry is initially cheaper, and it is a best seller for a good reason.
But, the Model 3 offers many more features at only a small premium cost, and in my opinion, the Tesla Model 3 is definitely worth the little bit of extra money.
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