Electric Vehicle Cost Efficiency: A 10-Year Total Cost of Ownership Comparison Between Tesla Model Y and Subaru Forester

The energy transition is reshaping the automotive landscape, and investors must now weigh not just upfront costs but the long-term financial implications of electric vehicles (EVs) versus traditional internal combustion engine (ICE) vehicles. This analysis compares the Tesla Model Y and the Subaru Forester over a 10-year ownership horizon, focusing on total cost of ownership (TCO), energy transition trends, and strategic investment considerations.

1. Initial Cost and Incentives: A Tale of Two Markets

The Tesla Model Y starts at $44,990 for the Long Range RWD variant in 2025, while the Subaru Forester begins at $31,415 for the Base trim. However, incentives tilt the scales. The Model Y qualifies for a $7,500 federal EV tax credit (if sourced and assembled in North America), effectively reducing its net cost to $37,490. This credit expires on September 30, 2025, creating urgency for buyers.

The Forester, lacking an EV tax credit, relies on the car loan interest tax deduction under the 2025 "One Big Beautiful Bill Act" (OBBBA). While this deduction allows up to $10,000/year in interest write-offs, only 1% of buyers qualify due to strict income and loan terms. For most, the Forester's lower base price remains its primary advantage.

2. Maintenance and Fuel Costs: Where EVs Shine

Electric vehicles outperform ICE vehicles in maintenance efficiency. The Model Y's annual maintenance costs average $949, compared to the Forester's $1,279—a 31% savings. Over 10 years, this translates to $3,300 in cumulative savings, driven by fewer oil changes, spark plugs, and transmission services. Tesla's 8–10 year battery warranty (covering 100,000–150,000 miles) further reduces long-term repair risks.

Fuel/charging costs tell an even clearer story. At $0.12–$0.24/kWh, the Model Y costs $500–$800/year to charge for 15,000 miles. Over a decade, this totals $5,000–$8,000. The Forester, burning $3.70/gallon gas at 25 mpg, incurs $2,220/year in fuel costs, or $22,200 over 10 years—nearly three times the EV's energy cost.

3. Insurance and Resale Value: The Hidden Trade-Offs

Insurance for EVs is 15% more expensive on average, with the Model Y costing $2,000–$4,000/year versus the Forester's $1,900. Over 10 years, this adds $10,000–$20,000 in higher costs for Tesla, offsetting some of its operational savings.

Resale value, however, favors the Forester. The Model Y is projected to retain 21% of its original value after 10 years (resale: $10,791), while the Forester's historical performance suggests 30–35% retention (resale: $9,425–$10,995). This gap narrows as EV adoption grows, but ICE vehicles still hold an edge in used markets, particularly in regions with limited charging infrastructure.

4. Energy Transition: The Long Game

The 2035 energy transition policies are pivotal. Electrification is expected to reduce electricity costs and stabilize energy prices, while gas remains volatile. By 2035, EVs could be cheaper to own than gas vehicles in 90% of U.S. states, per the 2035 Report 2.0.

For investors, this means Tesla's market share in EVs (and its stock performance) will likely outpace traditional automakers. Meanwhile, Subaru's ICE-focused strategy may face headwinds as ZEV mandates tighten.

5. Strategic Investment Takeaways

• For Short-Term Holders (0–3 Years): The Forester's lower upfront cost and higher resale value make it a safer bet.
• For Long-Term Holders (5–10 Years): The Model Y's $14,200–$17,200 savings in fuel and maintenance outweigh higher insurance and depreciation, especially with tax credits.
• Energy Transition Playbook: Invest in EV infrastructure (e.g., charging networks) and renewable energy stocks to capitalize on the shift. Avoid overexposure to ICE automakers, as regulatory tailwinds favor electrification.

Conclusion: The Future Is Electric, But Not Without Nuance

The Tesla Model Y emerges as the clear winner in long-term cost efficiency, driven by energy savings and maintenance advantages. However, its higher insurance costs and depreciation must be balanced against the broader energy transition narrative. The Subaru Forester remains a reliable, cost-effective ICE option for the near term but risks obsolescence as ZEV mandates accelerate.

For investors, the key is to hedge between EV adoption and ICE resilience, while prioritizing sectors aligned with decarbonization. The energy transition isn't just about cars—it's about reimagining mobility, and those who adapt will reap the rewards.