Andy Nurman
November 23, 2023
When it comes to luxury SUVs, the Tesla Model Y stands out as the most affordable option over a 5-year ownership period. According to calculations by Tesla that factor in depreciation, taxes, fees, incentives, financing, maintenance, repairs, insurance and fuel (gasoline or electricity) costs, the total cost to own a Tesla Model Y for 60,000 miles over 5 years comes out to $25,920.
That’s over $36,000 less than a comparable BMW X3, which rings in at a steep $62,280 over the same period. Remarkably, it even edges out non-luxury models like the Toyota RAV4, which exceeds the Model Y’s costs by about $8,000 over 5 years.
Even when you back out Tesla’s claimed $7,500 tax credit, the Model Y still clocks in at just $33,420 in total ownership costs.
Tesla’s strong value proposition is enabled by recent substantial price cuts enacted by the brand. This move down market raises questions around how to classify Tesla – is it still a luxury automaker, or are its vehicles now priced more inline with affordable, mass-market brands? Perhaps it’s shaping up to be both, fulfilling CEO Elon Musk’s vision of making electric cars accessible to mainstream buyers while still retaining a tech-centric, aspirational aura.
In any case, for those shopping luxury SUVs strictly on a budget, the Tesla Model Y represents a new bargain option with a total cost of ownership that challenges even non-premium models. It’s a disruptive shift that makes electrified transportation more financially viable than ever.
