Tesla Model 3 vs. Toyota Camry — 5 Year Cost of Ownership Comparisons

There are several cost of ownership calculations out there between the Tesla Model 3 and the Toyota Camry, but there’s always room for more. In fact, as more and more Model 3s pop up around me week after week, I’m feeling like the Model 3 is the new Camry. Let’s take a look again to see if that makes sense financially, especially after seeing how much more cost-competitive the Model 3 is than the Mercedes-Benz C-Class, Audi A4, and BMW 3 Series & 4 Series.

There have been a number of Tesla Model 3 price changes, EV tax credit changes, and Tesla software updates since I last produced 5 year cost of ownership comparisons between the Tesla Model 3 and the Toyota Camry. While the software updates don’t change the calculations at all (even though they do improve what Tesla is offering), the price changes and tax credit changes do alter the results. Additionally, based on reader feedback and some additional real-world experience, I’m modifying some of the other main assumptions a bit.

Just remember: these comparisons are not meant to be relevant to everyone! That would be impossible. They are based on what I think are fairly common or average figures, but there are so many variables at play that having a scenario perfectly match your situation is akin to winning the lottery. Therefore, I encourage you to crunch the numbers for yourself with some vehicle models that interest you. You can copy my Google Sheet and update each of the assumptions as best as possible for your life and expectations.

I think the numbers I used pretty much sit in the middle of the market. I could have easily made the numbers look much better for the Tesla Model 3 — by using $0 for charging (which is what I pay), a lower interest rate (the interest rate on my Model 3 loan is 3.75%), or many more miles driven a year (in a recent survey with 23 EV drivers in my area — almost all Tesla drivers — most of the respondents said they drive more than 21,000 miles per year, some more than 30,000 miles). Alternatively, I could have made the gasoline competitors look better by reducing miles driven, lowering the gas price, raising the electricity/charging price, decreasing the resale value of the Model 3, increasing the resale values of the other models, or lowering maintenance costs on the gasoline models, among other things. In the end, what I did is I put in the numbers that seemed most sensible to me for a generic 5 year cost comparison and then looked at the results. I did not do any biased tweaking after seeing the results in order to “get a result I wanted.” The result I wanted was a fairly realistic, mainstream group of comparisons with clear assumptions. Here are the results:

Shocked? So was I. Honestly. I expected the costs to be close, but I didn’t expect to see the Tesla Model 3 Standard Range Plus, a dramatically better car than the Camry, beat all three of these trims by a wide margin, especially the base trim.

That said, do remember that some of the 5 year cost benefits of the Tesla come at the end of the timeframe. Actual monthly costs for the Camry will probably be lower, even if average monthly costs over 5 years are lower.

Aside from cost, the Model 3 has scored significantly higher on safety, is much quicker, has much better infotainment and navigation tech, includes Autopilot, and even has more cargo room. I am actually suffering from cognitive dissonance right now trying to figure out how a car that is so much better is also cheaper.

I’m not going to go through all of the assumptions used in this analysis, but I think it’s important to point out a few of the assumptions that 1) are especially important to the outcome of the comparisons, and 2) diverge quite a lot between the Model 3 and the Camry.

Resale value: Kelley Blue Book, widely considered the top independent source for this matter, published a resale value estimate for the Tesla Model 3 that puts it at the top of the market. Because this is such an influential matter and the forecasts have such a large gap between them (48.7% value retention for a Model 3 versus 36.2% value retention for a Camry), this assumption ends up being responsible for a sizable portion of the difference in cost of ownership. That said, while there’s already a big gap between the models on this metric, and you’re free to narrow the gap if you think it should be narrowed, there’s also an expectation among many that the Model 3 will do even much better than Kelley Blue Book estimates. So, feel free to adjust the numbers in either direction based on your forecast.

Loan amount & interest rate: In all of the comparisons, I assumed $5,000 down and an interest rate of 4.25% on the remaining amount of cash needed to buy the cars. YMMV.

Price of gas: Gas prices are known to fluctuate wildly, and there’s no doubt we have some instability in the global oil market right now. What will oil/gas prices be next month? What about next year? What about in 5 years? Aside from variance across time, gas prices also vary a lot by region. Check current gas prices in your area and take your best guess at what the average will be in the coming 5 years.

Price of electricity (… er … charging): This is a trickier one than it may seem on the surface. Sure, if you have home charging, you can figure out your residential electricity rate and estimate the cost to charge your car a certain number of miles. However, if you have workplace charging, if you regularly charge at shops or parks in your area, or if you take road trips and have to fast charge a lot, you also have to roll in estimates for all of those charging costs (or free charging). In my own case, as noted before, I don’t have home charging but I do have tons of free destination charging (+ Supercharging) in the area (I’m actually not aware of anyplace nearby with paid charging), so I spend $0/day, $0/month, and probably $0/year on charging/electricity.

Miles driven per year: Since electric cars benefit from cheaper “fuel” and lower maintenance needs, people who drive many miles a year can more quickly recoup any upfront cost premiums on the Tesla Model 3 (if comparing these costs to the costs of a gasoline car, like the Camry). I used an estimate of 15,000 miles a year, since this is the default in the Edmunds 5 year cost of ownership estimates, but it’s easy to play with the results for different driving lifestyles. If you drive ~6,000 miles a year, like I did last year, the financial benefit from the operational savings becomes notably less relevant.

Maintenance costs: I used estimates for 5 year maintenance costs from Edmunds for the Camry models. For the Model 3, I used a variation of Paul Fosse’s analysis of the costs, adjusting the price up a bit in order to count a few more service needs and to also include a buffer for unknowns. Edmunds does not offer an estimate for the Model 3.

I hope that’s all clear and logical to you. If you’d like to try your own hand at the analysis, head over to this  Google Sheet now.

If you’d like to buy a Tesla and get 2,000 miles (3,000 km) of free Supercharging, feel free to use my referral code by October 1: https://ts.la/zachary63404. After October 1, it’s presumed that you will get 1,000 miles (1,500 km) of free Supercharging by using that referral code (or someone else’s).