Most importantly, it was too expensive.  Why would I spend $85K on a Tesla when I could buy nearly any other Japanese car for less, or even a BMW, Audi, or Benz?

Finally, I decided I had to test drive the car.  My wife and I did 3 test drives.  First, I test drove an S60.  Then, my wife drove an S85.  Finally, I drove P85+.  When I floored it outside the Tesla Fremont store, it was an out-of-body experience.

Still, the car was too expensive.

Then one day, I did a Google search for [Tesla cost of ownership] and similar terms.  I found a few threads and spreadsheets, but none that I liked.  They didn't take into account the time value of money and depreciation.  So I decided to make my own model.

I went onto Edmunds.com and looked at their cost of ownership numbers for internal combustion engine (ICE) cars.  Then I build a net present value (NPV) model that included 4 main factors: purchase price, fuel cost, maintenance cost, and depreciation.  I felt NPV was important, because a dollar today is worth more than a dollar four years from now.  I can put that dollar in the bank and earn interest on it.  I also felt that fuel and maintenance were important because they were such large parts of the total cost of owning a car.  And I wanted to include depreciation so that I could adjust the model if I decided to sell it sooner than eight years (the time frame I used).

When I was done, I looked at the results and was certain I'd made a mistake.  As expected, several of the other car models we had been shopping for were less expensive.  The RAV4 EV, which we had just purchased, decimated the pack.  (That's what you get when Toyota essentially pays you to take the car off their hands.  Maybe I'll write more about that later.) The Subarus also did well.

But there was a problem: The BMWs, Benzs, and Volvo V60 either fared the same or, more often, worse than the Tesla Model S.  And then there was the real shocker:

The Tesla Model S beat out the Honda Odyssey.

Before I go any further, some caveats about my analysis.

First, I built an accounting model, not a cash flow model.  I wasn't sure at that time whether I was going to purchase outright or finance, so I left that out.  Later on, a friend, Travis, built out a cash flow model.  The results are slightly different, which I'll discuss below. 

Second, I made a lot of assumptions.  The model is very sensitive to the rate of depreciation.  For the Model S, this is difficult.  The car is fairly new, and resale values are insanely high.  So we looked at Roadster values, thought about wear, tear, and battery replacement scenarios eight years down the line, and tried to get to a common sense number for how much a car would go for.  How much would I pay for a 2006 model year car, today in 2014?

Third, I also left out some stuff.  For instance, I left out insurance, because it's too particular to driving history, and because I was lazy.  I was also too lazy to try to translate safety ratings, HOV lane access, cargo space, and other features into a dollar figure.

So, convinced I'd made a mistake somewhere, I asked some friends to take a look.  I sent it to another Harvard Business School alumnus and finance director at a top tech company, a former Bain consultant with a PhD in Physics, a Haas MBA grad who owns and operates several small businesses, my brother (DaveT on TeslaMotorsClub.com, who is active in the investor forums there), and 5-10 other really smart people.

Over the next two weeks, they asked a lot of questions and made some suggestions, and I updated the model to reflect their feedback.  Finally, I looked at the results again.  The Model S still soundly beat the Odyssey.

At this point, I had to make a decision.  My wife wanted her husband back and gave me an ultimatum.  Buy the car or don't buy the car - just do it now.  She was not entertained that I was able to talk about cars ad nauseum over breakfast, dinner, and at bedtime.

So at 2am one evening, I sat back and asked myself, How would I explain this to someone sitting next to me on the plane? I'm a firm believer that if you can't explain something simply, you don't understand it very well.

And it came down to this: 

The Model S carries about $25-30K more in depreciation vs. an Ody ($55K vs. $25-30K).  But you save $20-25K on gas and $5-10K on maintenance.  In today's dollars, the Model S is less expensive than nearly any other luxury car, and more affordable than even the Ody.

We purchased our Model S in March, and sold our Ody and Leaf this month (April). (I'll write more about my purchase experience some day.) So far, we're pretty happy with the car.