A long time ago, it used to be that electric vehicles were somewhat of a rare luxury item — that only the rich upper class or the avid tech enthusiasts could afford.
But now, in 2020, electric vehicles (and Tesla vehicles in particular) are becoming more and more affordable and ubiquitous. Depending on where you live, you might see as many as one out of every 6 cars on the road bearing the Tesla emblem.
And this is their newest release — The Tesla Model Y.
This sporty entry into the midsize crossover category is an all-electric, dual-motor, all-wheel-drive vehicle with an estimated range of 326 miles for the long-range version that can go 0–60 miles per hour, as fast as 3.5 seconds, in the performance version.
It has seating for up to 5 adults (upgradable to 7 — in the near future) and more cargo space than a BMW X3 and the Mercedes GLC.
This new model, which debuted in the spring of 2020, is expected to become one of Tesla’s best sellers. In fact, during the company’s first-quarter 2020 earnings call, CEO Elon Musk declared that they were “confident this product will be our best-selling product ever,” as Tesla entered the mid-size cross over segment with this car — the most popular automotive category in the US, making up over 40% of all vehicles sold in the country.
So if you’re in market for a new compact SUV or crossover vehicle, and you’ve been especially interested in purchasing a Tesla Model Y — you’re in the right place because, in this article, I’m going to break down the true cost of owning this vehicle and show you how it compares financially to other models in its class.
Today, when it comes to purchasing and owning a Tesla Model Y — I’m going to be covering these five topics:
1) First, we’ll take a look at the seamless purchase process of the vehicle and the costs of all of the options at the point of sale.
2) Secondly, we’ll talk about some essential accessories you might want to add to your Tesla Model Y.
3) Then, we’ll talk about charging costs and the fuel savings that you’ll actualize vs. a gasoline vehicle.
4) Fourth — I’ll provide an overview of maintenance costs of the Model Y.
5) And lastly, we’ll put it all together and see how the overall cost of ownership of a Tesla Model Y fairs against comparable vehicles over a typical 6-year time frame.
So let’s start off with the purchase process of a tesla and the initial purchase price of the vehicle.
As premium electric vehicles, Teslas in general, are in the luxury category with price points that are commensurate. As of October 2020, the Model S starts at a base price of $69,420 for the long-range version, the Model X starts at $79,990, the Model 3 is the most economical at $37,990, and the Model Y begins at a $49,990 price point.
Now, the purchase process for a Tesla is very simple and straight forward. Tesla has no direct dealerships, only showrooms that serve as learning and marketing hubs for the customers, and all purchase transactions are done online — via their website.
If you’ve never purchased a car this way, it’s actually quite an interesting experience to buy a car in the same manner as you would, say, a computer from dell.com. They make it almost too simple to buy the vehicle.
Let’s walk through this process together.
First, when you hit the custom order button for the Model Y, the site takes you to a very streamlined configurator experience where you first decide if you want the long-range version or the performance version. As the name suggests, the long-range version will give you a longer mileage range with a slight reduction in power and speed — while the performance version adds an extra $10k to the base price and is all about speed and sporty feel, with a lowered suspension, performance wheels and brakes and a faster 0–60 speed. Let’s pick the long-range for now.
Next, you have a few upgrade options to choose from.
The base exterior color is included in the price, but if you wanted to change that, you would pay either one or two thousand dollars extra — depending on the color.
And since this is the long-range model with the base 19″ wheels, if you wanted to upgrade to the 20″ performance wheels, you could do so for an extra $2,000. For our purposes, let’s leave everything at the base selection.
In the interior section, you have your choice of black, which is included in the price, or an upgrade of white for $1,000.
Now the Model Y comes standard with 5 seats, but in the future, there will be an option for a 7 seat configuration, which would cost you $3,000 extra at that time.
The next section talks all about the autopilot and the optional full self-driving capability — which is an $8,000 dollar add on. (Shortly after this article was written, the price of FSD was increased to $10,000.)
For now, let’s leave it off — since the vehicles we’ll be comparing this to later on in this article don’t have this capability.
And that’s it — you’ve now reached the end of the configurator, and you’re now ready to enter in all of your personal details and reserve the vehicle for purchase. The only thing due at this moment is a $100 dollar non-refundable deposit to hold your reservation.
Now, the next step is to wait the indicated time period for your Tesla to be built and shipped from the factory to your location — which can take anywhere from one to as high as 12 weeks depending on your location and availability of the model you’ve selected. But when it does come in, here are some additional costs that are associated with finalizing your purchase of the Tesla Model Y.
There are several fees that are usually standard when it comes to purchasing a new vehicle. These three: the destination fee, documentation fee, and order processing fee, are generally included in total vehicle purchase price and typically fees that your dealership, or in this case, Tesla directly, charge you. The remaining vehicle registration and dealer prep fees are costs that are associated with the legal registration of the car for your state.
It’s important to remember, however, that each state and local requirements vary, so your costs may or may not include these same types of fees and the same amounts.
What I’ve inputted here is just the average costs that I could find online for these types of fees across the contiguous 48 United States, so your figures could definitely differ, but for the purposes of our comparison in this article, it doesn’t matter — since I’ll be keeping these fees consistent across all of the vehicles we’ll be looking at in this article.
Also, depending on what state you live in, you might also have a local government incentive or rebate — which on average comes out to be about $2,000.
And lastly, for this exercise, I assumed that just about half of the purchase price of the vehicle would be financed — so I put in a value here of $30,000 with a modest APR of 3 percent.
That brings our total purchase price of this new Model Y — to $58,024.
And if you assume that you have this vehicle for the average car ownership duration of 6 years — that comes out to $9,670 per year.
Now, let’s take a look at some essential accessories that you might want to get for your Tesla Model Y.
If you’re like me, you usually don’t go out a buy a whole bunch of accessories for your new vehicle — and there is definitely a lot out there that you really don’t need. But there were a few that I felt like were really fundamental to the ownership of a Tesla Model Y and would enhance your experience enough to make it worthwhile.
The first are these Tesmania All-Weather Floor Mats.
If you have toddlers or pets, then you already know how messy your vehicle can get — and there is nothing worse than getting a big stain on the floor of your new vehicle. So to guard against that, you’ll want some durable and easily washable all-weather floor mats that can take on all that your little ones can throw at them. These Tesmania All-Weather Floor Mats definitely do the trick.
Not only are they thick, durable, and easily washable, but they also have nice high edges — so that they prevent any spill over onto the sides of your car. I’d recommend getting the inner lining mats as well as the trunk and frunk mats as well.
The next thing I’d recommend is this center console hidden storage box that will allow you to store all of your valuables. It’s a quick and easy option to install a discrete compartment for your wallet, insurance card, or anything else you want hidden from plain sight.
And lastly, let’s take a few minutes and talk about charging. Every Tesla vehicle comes standard with this mobile charging kit.
And in the U.S., this mobile charging kit includes one mobile charger unit with a plug to fit your Tesla charging port, one regular 120-volt outlet adapter, and one J1772 socket adapter — that you can use to connect to most 3rd party mobile charging stations across the US.
Now, when you first purchase your vehicle — you have 3 charging options that you can utilize.
- First, You can use the mobile charging unit with the regular 120-volt adapter and plug it into any regular house electrical socket — and charge your vehicle just like you would charge your iPhone or laptop, or other small device. Now, one thing to note is that this is the slowest method of charging your Tesla and depending on where you live, you might eke out anywhere from 3–5 miles of charging per hour. That means if you have a 40-mile round trip commute to work each day — you’d have to plug in your car for at least 8 full hours in order to get that 40 miles covered. For a Model Y long-range vehicle — it’ll take approximately 63 hours to get a “full tank” at these charging speeds. If you have a very short commute or you don’t really drive that much throughout the week, you might be able to get by this way — but for most of us, this would be a bit inconvenient.
- The 2nd option you have — is to go out to a charging station and pay to charge your vehicle. There are many choices for 3rd party charging like Charge Point, EVGO stations, or you could go directly to a Tesla Supercharger station as well. But these cost more money than if you were to charge at home, and plus, there is the added inconvenience of having to find and drive out to one of these locations and wait there until your car is done charging. It’s great if you’re on a road trip — but not so practical on a daily basis.
- The most common option is to get a faster charging solution within your home, like installing a Tesla Wall Charger or getting a NEMA 14–50 outlet put in. The Tesla wall charger is a sleek $550 device that works like a small home charging station that can charge your car at much higher speeds than the standard 120-volt outlet at approximately 44 miles per hour. The NEMA 14–50 outlet is slightly slower in speed (around 30–35 miles) and is the same type of outlet you use to plug in your refrigerator or washer and dryer. But since it’s cheaper to install this option vs. the Tesla wall charger — let’s go with this one for the sake of this exercise/article. Now, in order to have this solution, you need to hire an electrician to install this NEMA 14–50 outlet professionally. You also need to buy an attachment option that will allow you to connect your mobile charging unit to the NEMA outlet. The electrical work will cost approximately $500, depending on where you live and which provider you use, of course, and the outlet extension costs about $35 from the Tesla website — so let’s include these things in our cost exercise as well.
So now that you have a NEMA outlet in your house and you can regularly charge your Tesla Model Y — let’s determine what the “fuel cost” is for your new electric vehicle. In order to calculate how much your charging cost is for your Model Y in your own home, you need to know 2 things — the electricity rate within your home and the amount of charging you are doing to your vehicle.
To find out your electricity rate, you simply go to your electric utility bill, and it’ll tell you what your charge per Kilowatt Hour is. For me, my electricity rate is $0.06 cents per KWH. (This is just my usage cost — I am purposely omitting the transmission and distribution costs here. And yes, I live in a state that has one of the lowest electricity rates in the nation — your costs may be different.)
Next, you have to know how much of your Model Y battery you charge on a daily basis, assuming you plug in every night, like the average tesla owner. While the Model Y has a total battery capacity of 75 kWh — most average Tesla owners typically only use up to about 50 miles worth of battery capacity a day — that’s about 15% of the battery capacity. So let’s say you charge 15% of the total capacity each night, which comes out to about 11 kWh per night. That means each night; it costs me $0.66 cents to charge my Model Y. If I charge every single day of the year (all 365 days), then my yearly electricity cost for charging the Model Y should be in the area of $240.
In comparison, a 2020 BMW X3 has a 17-gallon gas tank. And let’s say a typical BMW driver fills up on gas about 3 times a month. and usually fills up when they have about 1 gallon left in the tank. And I know gas prices vary widely depending on where you live — but in my neighborhood, gas prices are typically around $2.95 (premium), so if you calculate 16 gallons worth of gas at $2.95 per gallon (3x per month), that comes out to $141 per month or $1,699 per year.
That means by driving a Tesla Model Y — vs. a comparable gas-powered vehicle, you save approximately $1,459 per year.
Now, of course, everyone’s situation is different, and your numbers may vary widely from mine depending on where you live and many other factors — but it’s safe to say that you would be actualizing a fair amount of savings by driving an electric vehicle vs. an ICE vehicle.
Next, let’s look at the maintenance cost of owning a Tesla Model Y.
Teslas, in general, have very low maintenance costs — and the Model Y is no exception. Here is a list of recommended service that’s written in the Tesla Owner’s Manual.
- Rotate Tires — twice a year
- Clean/Lubricate Brake Calipers — every 1 year
- Brake Fluid Check — every 2 years
- Cabin Air Filter Replacement — every 2 years
- A/C Desiccant Bag Replacement — every 6 years
- Windshield washer fluid — as needed.
And that’s it. That is literally all that is written in the owner’s manual to maintain your Model Y. It has no engine, only two electric motors, so there is never any need to do an oil change or a fuel filter replacement. And there’s no coolant or transmission fluid to worry about — actually, no transmission at all. Additionally, no spark plugs, no timing belt, no ignition system, etc.
And in terms of the brake pads, on average, for an ICE car (Internal Combustion Engine), it’s typically recommended that you replace them every 25k -30k miles. Depending on how you drive, that may be a brake pad replacement every two years. (This, of course, varies greatly on your driving behavior.)
But on a Tesla, the life span of your brake pads usually extends over 100 thousand miles. How can that be, you ask? Well, it’s because of a cool innovation that all Teslas have standards — called regenerative braking.
The basic premise around regenerative breaking is that the electric motors in the Model Y are managed by a motor controller that can give it either a positive or negative torque command.
And torque put simply, is the twisting force that is applied by the motors that ultimately turns your wheels.
So when you press the “gas” pedal, the Model Y’s motors are given a positive torque command to turn the wheels forward and make you go — and when you take your foot off of the “gas” pedal, the motors are automatically given a negative torque command that causes resistance and slows the vehicle. And as it’s doing that — the kinetic energy that’s build-up from the resistance is then captured and fed back into the battery. This is called regenerative braking.
So not only does this functionality allow you to do one-pedal driving, preserving your brake pads, but it also feeds back a little bit of energy back to the battery every time you slow down in traffic. As a result, if you are utilizing regenerative braking — you would likely be able to go 100k miles or more without having to replace your brake pads.
If you want to learn more about regenerative braking, here are a couple of articles that you can check out:
Alright, so now, let’s put it all together and see exactly what the cost of a Model Y looks like over the course of a 6 year ownership period vs. a comparable gas-powered vehicle.
So starting from the top, in this exercise, we are comparing the new Model Y to a comparably equipped BMW X3 and a Mercedes GLC 300. From a base price standpoint, the Model Y is definitely $4k-$5k higher in price. And I’ve kept all 3 vehicles at their base configuration — to try to make it as fair of a comparison as possible.
For the other processing fees, I’ve kept them the same across the board with the exception of the Government EV credit that Teslas typically get, that other ICE cars are not subject to. That brings our total vehicle costs to roughly $55k for the Model Y and $51k for the BMW and the Mercedes.
For all three vehicles, I’ve assumed that most average purchasers would finance about $30k of the total cost at a 72-month term — meaning the total incremental interest amount paid would be $2,818, at a 3% APR.
Now let’s look at the accessories.
For the Tesla, we added the NEMA outlet adapter and the professionally installed NEMA 14–50 outlet, as well as the floor mats and the hidden storage box that we discussed earlier. But for the BMW and the Mercedes, I’ve added only the floor mats as that is the only item I felt would be applicable for all 3 vehicles.
Next, we get to fuel cost.
Using my electricity rate and the estimated average daily charge amount for most commuters, the cost of electricity to charge the Model Y for a duration of 6 years comes out to just over $1,400. In contrast, for the two ICE vehicles we have, at an average gas price of $2.95 per gallon with an average gas fill-up of 16 gallons per stop — it would cost just over $10k to fuel the BMW and the Mercedes for a period of 6 years.
And lastly, from a maintenance standpoint — let’s go line by line and see what needs to be maintained between the Tesla Model Y and the other ICE vehicles.
First, most ICE vehicles undergo an oil change every 6 months. And at $50 a session, that comes out to $100 per year or $600 for a duration of 6 years, for the BMW and the Mercedes. For Tesla, given that there is no engine in the car, no oil change is needed.
All cars need their cabin air filters to change at a minimum of every 2 years — which means in the course of 6 years; you would change them out 3 times. At a $40 fee each time, that’s a cost of $120 for the full 6 years.
The average ICE vehicle replaces their brake pads every 30k–40k miles, and that means on average every 2 years. At an average cost of $500 per axle — each brake pad replacement session for the whole car would cost $1,000. And if you do that every 2 years, you’d incur $3,000 of cost for the duration of the 6 years, in vehicles like the BMW and Mercedes. In contrast, as we discussed before if you have the Model Y and actively use regenerative braking to spare your brake pads, you would only have to replace your pads once within a 6-year duration — saving you approximately $2,000.
All of our cars would need their brake calipers and brake fluid checked and cleaned every two years — which at a $100 cost for the caliper check and a $150 cost for the fluid check, comes out to $600 and $450 dollar respectively for the 2 components — which I’ve allocated across the board for all 3 vehicles.
The next 3 items are ICE specific — because they relate to the internal combustion engine that powers their drive.
Fuel filters need to be replaced every two years, coolant and transmission fluid every 3 years, as well as maintenance for the ignition system every 3 years.
All cars need their tires rotated every 6 months or every 8,000 miles — so that means 12 rotations throughout the course of 6 years. And at a $150 fee per rotation, that’ll be a grand total of $1,800 when all of the rotations are done.
And the last 3 items are also common for all cars — an A/C desiccant bag replacement which is cheap and only needs to happen once every 6 years.
Windshield wiper replacements — also cheap but needs to occur at least once a year on average.
And windshield wiper fluid — super cheap but probably needs to be topped off at least once every 3 months.
And I think that’s it — I think those are all of the major items… but if there is anything I missed, please feel free to add them in on your own calculations.
And as you can see — from a maintenance standpoint, the Tesla is nearly half the cost over the course of 6 years when compared to other similar ICE vehicles.
And so — that brings us to our final conclusion.
The final total cost of ownership of a Tesla Model Y — over the course of 6 years, comes out to be $64,814.
In contrast, if you purchased the BMW X3 Xdrive30i, you would have paid $9,809 more for a total price of $74,622. And the Mercedes GLC 300 4Matic comes in $9,259 higher for a final price of $74,072.
So there you have it — if you are in the market to purchase a luxury SUV crossover, the new Tesla Model Y is a pretty decent choice.
By the way, if you’re ready to purchase the Model Y or any other Tesla model soon, you can take advantage of my Tesla referral code to get 1,000 free Super Charger Miles credited to your account — simply by clicking this link or entering this code (daniel63240) on the reservation form when you order any Tesla vehicle on their website.
So, I hope you guys found this breakdown helpful. And again, the figures I used in my calculation are from my own experiences, and so your situation or your individual cost calculations may differ — but I wanted to provide you guys one perspective on what the total cost of ownership could be for the new Tesla Model Y.
**** Disclaimer *****
The content here is strictly the opinion of Daniel’s Brew and is for entertainment purposes only. It should not be considered professional financial, investment, or career advice. Investing and career decisions are personal choices that each individual must make for themselves in accordance with their situation and long term plans. Daniel’s Brew will not be held liable for any outcome as a result of anyone following the opinions provided in this content.