Tesla's Model Y is much cheaper to own once you consider its long-term cost
Tesla (Edited by NATA)
Tesla has triumphed in Kelley Blue Book's 2023 5-Year Cost to Own Awards, with both Model 3 and Model Y emerging victorious in the Luxury Electric Car and Luxury Electric SUV categories. This prestigious recognition highlights Tesla's commitment to delivering vehicles with low projected ownership costs, making them the ideal choice for discerning car shoppers.
The Growing Importance of Total Cost of Ownership
Considering the total cost of ownership is becoming increasingly significant for consumers when purchasing a new vehicle. Factors such as fuel, maintenance, insurance, and vehicle depreciation can vary greatly among different models, making it crucial to select a car that aligns with your long-term budget.
Closing the Gap: Price Parity Between EVs and ICE Cars
Electric vehicles have often been perceived as more expensive than their internal combustion engine (ICE) counterparts. However, Tesla's aggressive pricing has closed the gap and, with incentives, are equal to the ICE competition in some regions. As price parity between the two is closing, Tesla is demonstrating even greater cost advantages over time. Teslas offer numerous benefits, such as lower maintenance requirements and reduced environmental impact.
Tesla's Innovative Design Leads to Additional Cost Advantages
Tesla's ingenuity extends beyond creating powerful, eco-friendly cars. Their models, like the Model 3 and Model Y, are designed to minimize long-term ownership costs. With no need for oil changes, gasoline, or transmission work, Tesla owners enjoy substantial savings compared to traditional ICE cars.
As a result, Tesla's vehicles not only deliver luxury and performance but also offer impressive cost advantages in maintenance and operation. These awards further solidify Tesla's position as a leader in the luxury electric market.
With an increasing number of consumers considering electric vehicles, Tesla's success in the 2023 5-Year Cost to Own Awards highlights the brand's dedication to providing long-term value. As the gap between EV and ICE car prices narrows, Tesla's focus on cost-effective, innovative vehicles redefines the electric car ownership experience. Tesla's Model 3 and Model Y prove that luxury, sustainability, and affordability coexist, making them attractive options for car shoppers seeking an eco-conscious and budget-friendly choice.
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Emissions Pooling is an incentive-based program supported by various governments—most notably the European Union—to help automakers meet strict carbon reduction goals under Corporate Average Fuel Economy (CAFE) standards.
CAFE standards mandate that automakers reduce the average CO₂ emissions across their fleet of newly manufactured vehicles. The EU’s 2025 targets are particularly aggressive, and manufacturers risk hefty fines if a sufficient portion of their new vehicles aren’t low- or zero-emission.
Emission Pool
Emissions pooling is a regulatory mechanism that allows automakers to combine their fleet CO₂ emissions to collectively meet environmental targets. Companies with low or zero emissions—like Tesla—can partner with higher-emitting automakers to help reduce their combined average and avoid costly fines.
In practice, this means pool members purchase emissions credits from Tesla, which uses its all-electric lineup to generate surplus credits. These credits help other manufacturers offset their emissions, while Tesla earns a tidy profit.
Tesla has long capitalized on this model, regularly selling emissions credits to strengthen its financials. Now, its European Union emissions pool is expanding again—with Honda and Suzuki joining existing members like Stellantis, Toyota, Ford, Mazda, and Subaru.
Green Bottom Line
Every automaker in Tesla’s emissions pool is effectively buying credits from a company with a 100% zero-emission fleet. In Q4 2024 alone, Tesla earned $692 million from regulatory and emissions credits, making up nearly 30% of its quarterly net income.
That’s a major chunk of profit driven by programs like emissions pooling—and with Honda now onboard, Tesla gains a significant new partner (and revenue stream) in the EU.
Tesla quietly included a cabin radar in its vehicles for several years before recently activating it through software update 2025.2. Tesla now uses the interior radar for several features, and later this year will add additional features that take advantage of the interior radar.
Cabin Radar Features
The first feature Tesla developed that uses the cabin radar is front row cabin sensing. Instead of relying on sensors in the seats to detect occupancy, Tesla now uses the radar to determine where people are sitting in the vehicle. The radar is much more accurate than a seat sensor, so not only will it prevent false positives that occur when placing a heavy object on the passenger seat, but it could also improve reliability by reducing the number of parts in the vehicle.
In future updates, Tesla intends to expand the occupancy sensing to the rear of all of its supported vehicles, which will help improve vehicle safety by correctly deploying airbags as needed on a dynamic basis.
Regular Radar vs 4D Radar
The 4D radar is Tesla’s latest iteration of the radar, which is capable of even more sensing features. While many of these features are still a work in progress and haven’t been enabled, we recently covered what’s coming for the cabin radar. For now, these 4D radars are limited to the Cybertruck and the refreshed Model Y, but Tesla intends to expand the 4D radar to other vehicles as parts become available. Older vehicles include a different part number for the cabin radar, but it’s not clear if or how that will affect upcoming cabin radar features.
Upcoming Cabin Radar Features
In Q3 2025, Tesla intends to add child-presence detection, as well as health-detection for critical emergencies. In short, the radar is a safety-focused addition and will be able to help protect an individual left behind in a vehicle.
In addition to child detection, the radar will also determine passenger sizes to dynamically determine which airbags to deploy, which can help reduce airbag injuries for shorter individuals sitting in the front seats.
The radar can automatically note if a child or baby is left behind in the vehicle and will notify you via the Tesla app immediately. It will also turn on the HVAC system to ensure their safety. In the case of an emergency, the vehicle can also automatically call emergency services in some cases and even report its location.
As a reminder, while Tesla vehicles outside of the United States support eCall, vehicles within the US cannot call 911 unless a phone is connected to the vehicle via Bluetooth. We hope that Tesla looks to add similar capabilities in North America to improve safety capabilities.
Which Vehicles Have Cabin Radars?
Tesla’s more recent lineup of vehicles includes cabin radars, but this isn’t an exact science, and we’ll explain why a bit further below.
Tesla includes the cabin radar on the 2024+ Model 3 and some 2022+ Model Ys. It’s also included on all refresh Model Ys, the Cybertruck and some 2021+ Model S and Model X vehicles, however, the exact hardware version of the cabin radar does differ between models. While there are different hardware versions for the cabin radar, it’s not clear whether all hardware versions will support all features in the future.
To complicate things further, some pre-refresh Model Ys (late 2022+) are already equipped with the cabin radar, while others are receiving a notice from Tesla to come in and have the radar installed. This is due to Tesla using the radar for driver and passenger occupancy sensing.
As such, some older Model Ys and Model 3s may either be equipped with the cabin radar or may receive a notification from Tesla to have it equipped to address the occupancy sensor recall.
Model S and Model X vehicles manufactured from approximately September 2024 should also include the cabin radar sensors, but it’s best to check to be sure. We’ve got some instructions below on how to do just that.
How to Check If You Have a Cabin Radar
There’s actually an easy way to check whether your vehicle has a cabin radar. To do this, you’ll need to enter Tesla’s Service Mode, which is aimed at technicians, but it’s perfectly safe to do so as long as you exit it before driving and don’t change any settings.
If you’re not sure how to access Service Mode, check out our Service Mode guide that will walk you through the process. Once you’re in Service Mode, use the menu on the left to navigate to the Safety & Restraints section and thenchoose Seats.
You’ll be presented with the seats panel that shows passenger occupancy. Between the two front seats, you’ll see a green box below or above the virtual screen. Tap on it and it’ll either say Restraints Control Module (RCM) or Cabin Radar (ICR).
Location of Cabin Radar
Not a Tesla App
On supported vehicles, the cabin radar is located between the two front seats above the rearview mirror.
Future Features
We expect Tesla to continue to develop features that rely on the vehicle’s cabin radar. Dog Mode, for instance, could be turned on automatically if you leave your pooch inside the vehicle and fail to turn on Dog Mode. Tesla can also trigger the rear HVAC fan even when the seat occupancy sensor isn’t triggered, which happens regularly with child seats.
Tesla is also expected to stop including seat sensors in every seat and instead rely on the cabin camera to detect passengers, reducing the cost of each vehicle. As with other Tesla features, new feature ideas on how to leverage the cabin sensor will come later as owners and product owners think of other clever uses for the new hardware.
