Putting Tesla to the Test

We drive the Model S to see if this pricey EV lives up to the hype.

As I glide through downtown Washington, D.C., in Tesla’s Model S sedan, heads turn, even though the famously luxe electric vehicle doesn’t make a sound. From the long, lean hood to the bulging haunches of the hatchback, the sleek silhouette evokes a fighter jet ready for takeoff. As I cross the bridge over the Potomac River, I press the accelerator to the floor and—whooosshhh—I’m flying.

When Tesla launched its limited-production Roadster in 2008, it was CEO Elon Musk’s intention to create electric cars that are better in every way than models that rely on the internal combustion engine. Job number one for Musk, whose innovations as a force behind PayPal, SpaceX and Tesla garner comparisons with Thomas Edison and Henry Ford, was to create a better battery. Depending on the version, Tesla’s battery can propel the Model S up to 265 miles on a full charge, quieting critics who have shunned EVs because of “range anxiety.” Despite a sticker price that starts north of $70,000, Tesla is selling more than 1,000 vehicles a month and closing in on sales of the Nissan Leaf and Chevrolet Volt.

The Model S is now the best-selling car in eight of the wealthiest 25 zip codes in the U.S.—all of them, as it turns out, in California, where Tesla is headquartered. With the help of substantial subsidies, these early adopters are driving the California dream machine.

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The value. With prices that range from $71,070 to $129,770, depending on the size of the battery and other enhancements, the Model S breathes the rarefied air of expensive European luxury sedans—and raises the bar. But a few things take some of the sting out of the price tag.

First, the Model S is eligible for a federal tax credit of $7,500. California, Colorado, Illinois, Georgia, Utah and West Virginia offer incentives of $605 to $7,500. Second, with an electric powertrain, the typical cost to drive the base model is about 4 cents per mile, versus, say, 18 cents per mile for the gasoline-fueled BMW 550i. If you drive 15,000 miles a year, you’ll pay $2,750 to fuel up the Bimmer but only $650 for the Tesla (assuming you pay 12 cents per kilowatt hour to your electric company). Measured another way, the Model S with the biggest battery (85 kWh) earns a mile-per-gallon equivalent from the Environmental Protection Agency of 90 mpge highway, and the version with a 60 kWh battery gets 97 mpge on the highway.

The Model S also requires less maintenance than its gas-engine peers. Because there is no engine (and, hence, no oil changes), maintenance is limited to a checkup about once a year at a service center. (Tesla has 41 service centers across the U.S. and another 19 are on the way.) The battery warranty is eight years or 125,000 miles on the base model (eight years with unlimited mileage on 85 kWh models).

The National Highway Traffic Safety Administration gives the sedan five stars—its highest rating—in every safety category: frontal crash, side crash, rollover and overall. The Model S has eight airbags, including knee airbags for the driver and front passenger. The engineless front end protects passengers in a collision, and the battery has firewalls to contain damage in a crash. (A recent fire after a Model S hit a metal piece of a semi tractor-trailer sparked debate over the car’s safety, but Tesla says it performed as designed and that the onboard alert system instructed the driver to pull off the highway and exit the vehicle.)

The Model S is roughly the size of a Ford Taurus and seats five. The rear hatch has 26 cubic feet of storage space (the Taurus’s trunk holds 20 cubic feet), and fold-flat seats increase it to 58 cubic feet. Plus, you’ll find extra storage space under the hood. The optional rear-facing child seats ($2,500) expand seating to seven.

On the road. In motion, the Model S morphs seamlessly from family hauler to Speed Racer. The base model has 302 horsepower and goes from zero to 60 miles per hour in less than 6 seconds. The top-of-the-line Model S Perform­ance puts out 416 horses and sprints to 60 in 4.2 seconds.

With instant torque typical of electric vehicles, it’s capable of disconcertingly quick acceleration, yet the ride remains composed and the vehicle feels planted, thanks to a low center of gravity. Adjustable drive and brake controls change its character from staid to sporty with a few taps on the touch screen.

The Model S is a gadget geek’s wonderland. Walk up to the vehicle with the key in your pocket and the door handles, which sit flush with the body, pop out. There’s no start button; simply shift into drive and go. Inside, a colossal, iPad-like touch screen controls everything from climate to driving modes. Google Maps and a 3G Internet connection are standard.

All models come with an onboard charger and adapters for standard household outlets, 240-volt outlets and public charging stations. The total charge time with a 240-volt outlet is seven to ten hours. With optional High Power Home Charging ($2,700), you get Tesla’s High Power Wall Connector to install in your garage, enabling you to juice up twice as fast. With a Supercharger ($2,500 on the base model and standard on 85 kWh models), you can connect to Tesla’s network of fast chargers throughout the country and replenish more than half a charge in 20 minutes. Tesla anticipates building enough stations to ensure coast-to-coast travel early in 2014.

At the store. First off, there are no dealerships. Tesla has 35 “stores,” where you can take a test-drive. The com­pany’s direct-sales model means cars go from the factory to the buyer with no middleman—a tactic that has resulted in legal battles with dealers over Tesla’s right to sell in certain states. And there is no haggling over price. You pay sticker.

Instead of offering a choice between a loan and a lease, Tesla combines the two. Finance with the company for at least 36 months and your vehicle is backed by Tesla’s resale value guarantee. That means if you turn in the car after 36 to 39 months (as long as it has less than 45,000 miles), Tesla will buy it back at 50% of the original price and 43% of the cost of options. If you pay cash or bring your own financing, the vehicle won’t qualify for the buyback.

By the end of 2014, Tesla will start selling an electric SUV called the Model X that seats seven. In early November, pricing had not been announced, but it’s likely to top $70,000. Tesla’s next big test is whether it can cut the cost of the battery enough to produce a more affordable model by 2017. (For information on Tesla’s stock, see 5 Stocks to Sell Now, and Tesla Takes Off.)

Jessica L. Anderson
Associate Editor, Kiplinger's Personal Finance
Anderson has been with Kiplinger since January 2004, when she joined the staff as a reporter. Since then, she's covered the gamut of personal finance issues—from mortgages and credit to spending wisely—and she heads up Kiplinger's annual automotive rankings. She holds a BA in journalism and mass communication from the University of North Carolina at Chapel Hill. She was the 2012 president of the Washington Automotive Press Association and serves on its board of directors. In 2014, she was selected for the North American Car and Truck Of the Year jury. The awards, presented at the Detroit Auto Show, have come to be regarded as the most prestigious of their kind in the U.S. because they involve no commercial tie-ins. The jury is composed of nationally recognized journalists from across the U.S. and Canada, who are selected on the basis of audience reach, experience, expertise, product knowledge, and reputation in the automotive community.