The initial purchase price of a Tesla model Y may be quite a bit more than a Honda CRV hybrid, however, when you consider the various savings associated with driving a battery electric vehicle and also available incentives, the true cost of driving a Tesla Model Y for five years is likely less than you think. In a five year true cost comparison, which of these vehicles actually costs less?

Battery Electric Vehicle vs Mild Hybrid

The Honda CRV hybrid is considered a mild hybrid, meaning that it doesn't have a plug, and the very small approximately 1.1 kilowatt hour battery pack that it does have can only be charged while driving with a gasoline engine. On the flip side, the Long-Range all wheel drive model Y offers over 300 miles of EPA rated pure electric range and doesn't have a gas engine spewing exhaust into the environment. But the model Y does have an initial price premium over the Cr-V hybrid.

Initial Purchase Price

The starting cost of the Long Range AWD Model Y before you add any delivery fees, taxes, upgrades, etc. is right under $55,000. If you add in the $250 order fee and the $1,390 destination fee, that gives you a starting purchase cost of just a bit under $57,000. However, thanks to the recent Inflation Reduction Act, the Tesla Model Y now actually qualifies for up to a $7,500 federal U.S. tax credit. So, for those who actually qualify, this actually makes it more affordable, and has the potential to bring the equivalent net purchase price, after the tax credit, to a bit under $50,000.

When it comes to the CRV, Honda currently offers a CRV and two different hybrid variants: the Sport Hybrid and the Sport Touring Hybrid. However, when you compare features and technology between the Model Y and the CRV, the Sport Touring Hybrid really is the closest match for the Tesla Model Y. According to Honda, that vehicle has a starting MSRP of just a bit over $39,000. However, to get a real true purchase cost, I went over to truecar.com and according to their data, an actual selling price for this vehicle is just a bit over $40,000 when you include the delivery or destination fee.

So, without the tax credit, there's a bit over a $16,000 difference between these two vehicles. However, for those who qualify for the $7,500 tax credit, that makes it Long Range AWD Model Y just a bit under $9,000 more than the CRV Sport Touring Hybrid, which is still quite a substantial price difference. However, we need to do some more math and look at the true cost of these vehicles beyond just the purchase price to get the real ownership costs.

True Cost Factors to Consider

In order to get a true 5-year cost comparison between these vehicles, we also need to determine the average miles driven energy and fuel cost, vehicle efficiency, insurance cost, finance costs, maintenance and repair cost, and also the estimated depreciation after 5 years of ownership.

Average Miles Driven in USA

One big important factor that really influences your five year true cost of ownership for a vehicle comes down to how many miles you drive that vehicle per year. In the U.S., the average number of miles driven per year varies quite a bit based on age, according to the U.S. Department of Transportation. But, based on the data they have made public, around 15,000 miles per year seems to be a good middle of the pack number.

Average Electricity & Gasoline Price

When it comes to the average electricity prices for the U.S., those numbers actually very quite a bit region to region. However, in order to get a basic average of the electricity cost nationwide, I found helpful data on the U.S. Bureau of Labor Statistics website. based on the various regions, divisions and metropolitan areas they have listed in their chart for February 2023, the average average USA electricity rate is around $0.21 per kilowatt hour. When it comes to the national average, gas prices, according to AAA’s website when this data was pulled, the average cost of a regular gallon of gas was just a bit under $3.46.

Vehicle Efficiency

According to fueleconomy.gov, the Long Range AWD Model Y requires 28 kilowatt hours to drive 100 miles. On the flip side, the Honda CRV hybrid AWD, is able to travel around 37 miles on a gallon of gas (combined city/highway estimate).

Insurance Cost

Insurance cost can vary quite a bit from company to company and from person to person based on your driving record and also where you live, however, I did call my insurance company and get actual quotes for these vehicles for our comparison. For the 2023 Long Range AWD Model Y, I was quoted a monthly rate of just a bit under $102 per month, and just a bit under $70 per month for a 2023 Honda CRV Hybrid Sport Touring.

Finance Cost

For this category, I'm not adding up the total sum of all the monthly payments in this calculations. We're just going to talk about the interest that you actually pay, because once again, for our calculations, we're assuming that the owner sells the vehicle after 5 years of ownership and extracts the value out of that vehicle, which will account for all the payments that were made. When it comes to loan terms, I'm assuming a 5-year loan, at a 6% interest rate with a $4,500 down payment. I will use interest calculations from bankrate.com.

Maintenance and Repair Cost

Next, when it comes to the cost of repairs and maintenance, I know that number can vary quite a bit from person to person because some people will do a lot of maintenance themselves, and other people prefer to take their vehicle to the dealership for maintenance. To be fair, I'm going to use data from edmunds.com for the CRV Hybrid and the Model Y.

Edmunds doesn't have data for the 2023 Honda CRV hybrid, but will use data for the 2022 model year. They estimate that after 5 years and 75,000 miles, maintenance for the CRV Hybrid should cost a bit over $5,300, and repairs should cost just a bit under $700.

For the Model Y, Edmunds does not have data for the 2023 model, but for the 2022 model year, they estimate that once again, after that same 5-years and 75,000 miles, repair cost will cost somewhere around $2,100 and maintenance will come to just a bit over $2,400.

Vehicle Depreciation

The last big piece of data that we need before we add all these numbers up is vehicle depreciation. Unfortunately, the CRV did not come in in a hybrid version 5 years ago, so we will look at the best available data that we do have. In 2020, Honda did offer a CRV hybrid model and the Touring model had an original starting purchase price back in 2020 of just a bit over $37,000. Using data from kbb.com, the private party resale value of that vehicle after 5 years and 75,000 miles is just a bit over $30,000. So, if you do that math, this vehicle has lost nearly $7,000 or around 19% of its value. However, that's only for three years of ownership. We really need to look at a 5 year ownership span to get a more accurate comparison. So, if you pull up a 2018 CRV Touring model (non-hybrid), that vehicle had a starting purchase price of just a bit over $35,000. According to kbb.com’s estimates for private party resale value, that vehicle has lost approximately 28% of its value after 5 years and 75,000 miles.

If we pull up data for the 2020 Model Y Long Range AWD (which is the first year that the Model Y was available), that vehicle had an original purchase price of just a bit over $51,000. Once again using private party value estimates from kbb.com, after 3 years and 75,000 miles, that vehicle has lost around 26% of its value. However, since we need a 5-year, not a three year estimate, I went pulled up data for a 2018 Model 3 Long Range which had a purchase price of just a bit over $50,000, to serve as a comparison. According to kbb.com’s estimates, based off of the private party resale value, that vehicle has lost around 34% of its value after that same 5-years and 75,000 miles.

Using this data, I'm going to estimate that in 5-years and 75,000 miles that the Honda CRV Hybrid Sport Touring AWD will lose around 28% of its value, and the Tesla Model Y, after that same time period and miles driven, will lose around 34% of its value.

True 5-Year Cost: Model Y Long Range AWD

Now that we have all of that data gathered together, let's now move over to our calculations starting with the Model Y Long Range AWD to determine the true 5-year cost. When you add up sales tax, energy costs, insurance costs, finance costs, maintenance and repair costs, and also a 34% loss of value, that that gives us a 5-year cost of ownership of just a bit under $47,000 or around $0.63 per mile. However, a lot of people watching this video will qualify for that $7,500 U.S. federal tax credit. So, if we actually subtract that $7,500 credit from these calculations, that brings us to under $40,000 or around $0.53 per mile.

True 5-Year Cost: CRV Hybrid Sport Touring AWD

When it comes to how this compares to the Honda CRV Hybrid Sport Touring AWD, we get a 5-year total cost of ownership of just a bit over $37,000 or around $0.50 per mile.

Model Y vs CRV Hybrid True 5 Year Cost

In a side-by-side comparison without the tax credit factored in, there's around a $0.13 per mile difference between the Model Y and the CRV hybrid and with the $7,500 tax credit subtracted, that difference narrows to the Model Y only being around $0.03 more per mile over the CRV Hybrid.

Level 2 EV Charger Cost

As a side note, it is also a good idea to factor in the cost of installing a wall charger for the Tesla Model Y, because it's going to be a lot more convenient to have a level 2 charger, which will charge at a much quicker rate than just a 120V outlet. On Tesla's website, you can buy a wall connector for $425. For installation of this wall charger, Tesla estimates that the cost of a straightforward installation of these chargers can cost around $750 to $1,500.

Local EV Incentives

Make sure that you check for local incentives, which can actually make a huge difference when it comes to the math and the affordability of an electric vehicle. Because when you take into account a big incentives like California currently offers, this could make the Model actually cost roughly the same as a CRV hybrid. In addition, if you have solar on your roof or you pay less for electricity, etc., you might actually find out that the Model Y could be for you cheaper after five years of ownership than my estimates. I recommend that you check all this out for your exact situation and do the math for yourself. But as you see owning a Tesla model Y, an all electric Tesla model Y might be more affordable than you may have thought. Do let me know what you think about all this in the comment section below. I'd love to hear from you

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