Analysis on Why You Should and Should Not Buy a Model Y
As with anything, there are pros and cons to this SUV. While a great option for the wealthy, not the best option out there for most people. The Tesla Model Y is Tesla’s take on an affordable electric SUV for the masses, and is based on their Model 3 sedan platform. Looking at them side by side you can see the resemblance between the two; and, given the success of the Model 3, there has been a lot of buzz regarding the Model Y’s potential. We will explore some of those below while maintaining an objective viewpoint.
Why you should
“… there is no other small SUV that can offer nearly as much fun…”
Tesla’s Model Y offers the all impressive Performance package with AWD, top speed of 145 mph and a 0–60 mph time of 3.5 seconds. All of this at $67,990 before any savings through incentives and gas savings. After going through dozens of performance SUVs, this is the quickest SUV as reported by manufacturers. Even the incredible Lamborghini Urus at $205,000 MSRP is reported to achieve a 0–60 in 3.6 seconds. Although MotorTrend has reported have achieved sub 3.5 seconds 0–60 times in the vehicles below, they have yet to test the Model Y Performance.
In addition to being mind-blowing quick, this Tesla will also buy you into the pinnacle of artificial intelligence and future of the automotive industry. Although Teslas’ autonomous driving is already the most advanced in the industry, what is even more impressive is their potential to develop a fully autonomous vehicle for the real world. Artificial intelligence relies on data and repetition to grow and improve results exponentially, and no other automaker has been able to log anywhere near as many miles for autonomous driving. On top of that, they are able to use data from miles driven by their customers’ vehicles and they completely dominate the electric vehicle market. With these considerations, there is no doubt that the Model Y’s autonomous driving feature is, and will continue to be, the most advanced system in the world.
You should definitely buy the Tesla Model Y if you are in the market for a luxurious, sporty, and technological vehicle with reliability, comfort, and practicality . At $67,900 there is no other small SUV that can offer nearly as much fun and peace of mind. Gone are the days of debating between purchasing a sports car or a utility vehicle. You can now have them both and enjoy it as a daily driver!
Why you shouldn’t
“While the Model Y Long Range without autonomous driving costs 38% less to drive than the Toyota RAV4, the initial cost is also 78% more than that of the Toyota”.
Although there is no doubt that the Tesla Model Y offers the greatest value for your money in terms of overall features, there are downsides to everything. One of the biggest arguments I’ve seen for purchasing a Tesla, and electric vehicles in general, is fuel savings. Even within Tesla’s website they will default to showing prices for their vehicles “after estimated savings.” These savings consist of rebates given by different states and also savings in fuel consumption. Even with today’s very low fuel prices, it continues to be cheaper to operate an electric vehicle than a traditional gas powered vehicle; but, that doesn’t mean you will actually save any money in the long term.
After collecting data for other comparable small SUVs, it was clear that even hybrid vehicles like Toyota’s RAV4 XLE Hybrid are a long way from competing with Tesla’s cost per mile. However, we also need to consider that there is a premium paid whenever purchasing a Tesla. While the Model Y Long Range without autonomous driving costs 38% less to drive than the Toyota RAV4, the initial cost is also 78% more than that of the Toyota. Both are equipped with AWD, both models are priced to hold 5 passenger, and carry virtually the same cargo capacity. Some might argue that the Model Y is more luxurious or has more features than the Toyota, so below I also compare the specs for the popular Mazda CX5 in its’ Grand Touring Trim and the ever so luxurious Cadillac XT5. In all cases we see that it costs more to purchase the Model Y than these competitors.
I know what you’re thinking — The price after estimated savings for the Model Y is about $1,500 less than that of the Cadillac XT5. What the numbers here do not show, is how long it will take the owner to harvest those savings. The numbers on the previous table are based on $4,000 in savings from Colorado’s EV rebate and an additional $4,000 from savings in gasoline. On the other hand, states like Washington and Ohio barely offer rebates, while California can almost double the rebates of Colorado. In addition, dealerships offer their own sales and rebates all the time for vehicles like the ones shown on the table, while Tesla’s business model doesn’t allow for the same flexibility in discounts and negotiation. For that reason, I kept both numbers on the table and each individual can compare how much they would save in rebates or discounts at the dealership after some negotiating. As for gas savings, that will vary depending on gas prices and what vehicle we compare it to. In this case, we have today’s ridiculously low gasoline prices averaging $2.50 and $2.00 per gallon for premium and regular gasoline respectively. Below is a comparison of how much the owner of each vehicle will spend to power their SUV year over year based on 13,476 miles driven each year (the national average in the US).
The chart shows that it’s not until year 9 that the Model Y becomes a more economical vehicle to drive than the XT5. That is the equivalent of over 121,000 miles driven. On the other hand, the Mazda CX5 and Toyotoa RAV4 continue to be more cost effective to drive even after 30 years or 404,000 miles. This raises the very important question of just how much people actually save driving a Tesla. Another popular argument for owning a Tesla is their inherent reliability and low cost of maintenance given the battery’s lack of mechanical components. Below is a chart which analyses to the cost to own of each vehicle by combining purchase price, cost to run or power, and cost of maintenance and repairs.
Given how new the Tesla Model Y is, we can’t gather data specific to this vehicle in order to compare; but, we can use data from other Tesla vehicles which have been designed and manufactured in very similar fashion. Especially the Model 3. At an estimated $796 per year in maintenance and repairs, it is definitely cheaper to maintain a Tesla Model Y. Especially when compared to $1,872, $1,084, and $1,205 for the XT5, CX5, and RAV4 respectively. That is a savings of anywhere between 26–57%. When we look at it over time though, the Model Y still comes out to be a difficult sell looking at it financially.
You should not buy a Tesla Model Y if you’re not financially set for life. When we look at the numbers in an objective manner, there is no reason why someone should purchase this vehicle other than a pretty big luxury. Instead of buying a Model Y, you can purchase a Toyota RAV4 XLE Hybrid. You would have an extremely reliable vehicle, have the same practicality as the Tesla, almost twice the range for road trips, still contribute to reducing emissions, and save $23,000 in the purchase price. That is money that can be used to pay off student loans, credit card debt, mortgages, or even invest in yourself. And even after 30 years, you will still have saved $16,000 that can go a long way to your financial independence.
