It’s worth looking into a covered walkway from garage to house if you use your garages daily for parking and live in a wet or snowy clime.

Your builder is in the best position to give you a ballpark cost. Many factors not mentioned in your post go into the retaining wall cost - design, material used, drainage required, height, length, lighting, builder profit.

Is it possible (and cheaper) to regrade the lot in this area to eliminate the need for a retaining wall?

I have no idea without some pictures of the house and garage but I guess the price is what it is and how often will you need this for guests . We had a circle driveway at the home I grew up in it was geat when we had a big party but the rest of the time it was never used we parked in the back where the garage was . I think a nice covered walkway with some pretty landscpaing might be a better choice but I need context . Retaining walls can be any price depending on how you want them to look and also how large they need to be and what are they holding back We did a 60' long one that keeps back all the dirt and landscaping from a hill beside our outdoor dining room the bricks were not bad price our son and my hubby installed it but before we did that we had a fortune spent creating the space above the wall. with all kinds of drainage , big O all to keep the wall safe from too much water intrusian so we need context please .

We spent a fortune on retaining walls in our previous house ... and none of them needed to support the weight of a car. You builder needs to contact his hardscape/paving subcontractor and give you a ballpark price.

A site plan with footprints would help. I'm picturing your word description, and the garage faces front (where the driveway enters, assuming), and a porte cochere is a pass-through for a vehicle. So that means a car drives to the backyard - why?