Update: We initially had a non-black paint selected, which led to a price of £39,850 instead of the actual base price of £38,900. This article (including headline) has been updated accordingly.
Patience is a virtue. After a long wait, UK customers can now place their orders for the Tesla Model 3 — for June delivery. Prices for the Standard Range Plus, which includes Autopilot, starts at £38,900 (on-the-road price, after incentives). Get your order in quickly if you want early delivery.
UK vehicles are priced including delivery charges and document fees (as well as taxes, etc.), so the £38,900 is the final price that owners will pay to be “on the road.” This also already includes the £3,500 UK “Plug-In Car Grant.”
Remember that the Tesla Model 3 Standard Range Plus already has the Autopilot option included, which gives advanced cruise control, advanced lane keeping technology, and pedestrian detection (on top of all the active safety systems included in all Teslas).
How does this pricing stand up against an “equivalent” fossil saloon like the BMW 3 Series? We’ve already seen that, in reality, there is no equivalence. The performance version of the Tesla crushes the performance BMW.
Compared to the Tesla Model 3 Standard Range Plus, the closest BMW 3 Series in basic power and on-paper performance is likely the 330i M Sport Gran Turismo, with acceleration to 62 mph taking 6.1 seconds (compared to the Tesla’s 0–60 mph in 5.3 seconds). The price of this BMW in the UK — with a level of optional equipment to bring the driver assistance features closer to those in the Tesla — starts at £42,505.
That’s an upfront price £3,605 more expensive than the Tesla.
Cost of Ownership Advantage — Fuel
Consider the fuel costs of the BMW — its official WLTP fuel economy is 34 MPG. Driving 10,000 miles per year — 294 gallons @ £5.45 per gallon — costs a little over £1,600, every year, in fuel.
The Tesla’s rated economy is not yet known for the Standard Range Plus model, but is likely right around 250 Wh per mile. That means 10,000 miles would require 2,500 kWh, which — when charged mainly on cheap overnight rates of £0.07 per kWh — costs £175 per year. In some situations, owners will pay a bit more per kWh — and in others, less (e.g., with a referral code and some free Supercharging, or with destination charging). Overall, the annual energy cost of the Tesla is still going to be around £1,400 less than the BMW. Every year.
Over 5 years of ownership, that’s £7,000 in fuel savings.
Or £14,000 in savings over 10 years.
Photo by Skitterphoto on Pexels
Side note: This significant annual fuel cost savings of £1,400 per year — similar in all parts of Europe (€1,630) — is a major reason why EVs remain highly valued even as they age. When you’re on a tight budget and want to save money on your vehicle costs, you tend to look for an inexpensive used car. Is it better to buy a £3000–£5000 used fossil car that costs you £1500 per year in fuel and is worth at best £2000–£3000 after another 5 years, or to buy a £6000–£10,000 used EV that costs you £150 per year in fuel and is still worth £5000–£8000 (to the next frugal owner) after 5 years?
The first route has cost you around £1500 in asset depreciation, and £7500 in fuel over 5 years — £9000 in total. The second route has also cost you around £1500 in asset depreciation, but just £750 in energy over 5 years — £2250 in total. That’s a saving of £6750 over 5 years. In other words, the additional £2500 in upfront cost has repaid itself 3× over the 5 years of ownership. Even ignoring the growing maintenance costs of fossil vehicles as they age, EVs are much less expensive to own. This is why sensible folks are happy to pay a bit more for EVs upfront, as used vehicle, and make much, much, more money back in the relatively huge savings in running costs.
Let’s see what this fundamental advantage has on depreciation rates on the Tesla vs. the BMW…
Cost of Ownership Advantage — Depreciation
We can’t yet know what the exact depreciation rates will be for the Tesla Model 3 in the UK, but in the US, Teslas have historically held their value better than almost any other vehicle. We have already seen that the latest generation of fully fledged EVs are in very high demand (with 1 to 2 year waiting lists in some cases) and are holding their value very strongly in European markets.
With all the hardware already on board for Full Self Driving (FSD), and able to receive regular software updates that can add significant new features (even improve performance) for years to come, the Tesla will certainly hold its value much better than the BWM, which has none of these abilities, nor ever will. Once you’ve bought the BMW, that’s what you’ve got. Like most vehicles — nothing improves over time.
In several UK cities, polluting fossil vehicles are already facing restrictions, fees, and bans, which will only increase in the coming years. These restrictions and fees are already ramping up in London. The Tesla Model 3 will be free from pollution restrictions forever. The BMW’s retained value will plunge more steeply as such restrictions grow.
From our short side note above, on the savings that even used EVs provide, unsurprisingly, almost all EVs are turning out to have a very decent value floor as they age. 2014 Nissan LEAFs in decent condition — although 5 years old and with sub-100-mile range — are retaining their value at over £10,000 in the UK, and have plateaued at this value for a while now.
Because of this — and in addition to its FSD capability and over-the-air updates — I’m going to assume that the Tesla will still have a residual value of £10,000 at 10 years of age. The BMW, on the other hand, has locked-in-for-life high annual fuel costs, increasing city bans and restrictions, and will be widely viewed as an unavoidably costly, noisy, polluting, archaic fossil technology in 10 years time. As we approach 2030, and the world has changed, the BMW will be lucky to have a residual value of £5,000.
Total Cost of Ownership (TCO) Advantage over 10 years
Let’s assume that insurance and maintenance costs of the two vehicles will be similar (even though we know that the BMW will in fact need significantly more maintenance as it approaches its end-of life). Recall that the Tesla Model 3 batteries are rated to maintain decent service over at least 1,500 cycles, which is 360,000 miles of service in the Standard Range Plus. This is over 3× the mileage that average UK drivers will cover in 10 years.
Model 3 drive unit & body is designed like a commercial truck for a million mile life. Current battery modules should last 300k to 500k miles (1500 cycles). Replacing modules (not pack) will only cost $5k to $7k.
— Elon Musk (@elonmusk) April 13, 2019
Since we’ll be generous and say the maintenance and insurance are approximately similar, let’s instead focus on estimating the 10 year TCO differential between the two vehicles, based on the depreciation and fuel costs.
On the above depreciation assumptions, the Tesla’s total asset depreciation over the 10 years will be £28,900, whereas the BMW will be £37,500. That’s a 10 year advantage of £8,600 to the Tesla.
Then let’s add in the £1,400 yearly savings on fuel costs, or £14,000 over 10 years.
That puts the 10 year TCO saving at £22,600. That’s a huge TCO advantage for a Tesla Model 3 owner, compared to the TCO for a BMW 3 Series owner.
As noted, above, the initial UK delivery estimates (for all model variants) for orders placed today are “June 2019.” However, this will inevitably shift into July and August as more folks jump into placing their orders and the queue quickly grows in length. If you are in the UK and want a Tesla Model 3, it is worth getting your order in ASAP to ensure you can take early delivery. Be sure to use a referral code to get the benefit of some free Supercharging. Feel free to use our referral code to get 5,000 miles of free Supercharging: http://ts.la/tomasz7234 (or not).