Tesla has kicked off the fourth quarter of fiscal 2023 in Australia with a significant drop in prices across every variant of the top-selling Model 3 electric sedan.
The prices of Australia’s best-selling EV have been slashed by another $3,000 on all variants, taking the price of the base RWD version to just $60,900, before on roads and rebates.
It is the second time this year that Tesla has slashed its prices on the Model 3. In January, Tesla dropped prices on both the Model 3 and Model Y variants by between $1,600 and $3,400.  That was after clearing most of the backlog of orders from 2022, many of which were delivered in Q1 2023.
The price cuts come amid speculation from analysts that Tesla will choose to slash prices of its best selling Model 3 and Model Y EVs in many markets – to justify its production targets of two million vehicles a year in 2023, and to put pressure on rival EV makers.
Tesla is under pressure from Chinese EV makers such as BYD, which is challenging it for the number 1 ranking in the world, and also from the slowing global economic environment, and the pressure on financial institutions. Its share price fell six per cent on Monday as some analysts questioned the 2023 forecasts.
“We believe Tesla and its EV competition may require further price cuts to achieve the higher end of consensus volume expectations this year,” Morgan Stanley analysts wrote this week.
But they note that Tesla has a considerable cost advantage over most of its legacy car maker competitors, thanks to its sizeable margins and new production techniques that will cut costs further. It may need to.
“We are of the opinion that without the aggressive price cuts, Tesla sales may not have grown on a sequential basis, a sign that even the most dominant EV player is not invulnerable to a slowing macro and competition,” the analysts write.
The new price cuts will mean that anyone awaiting delivery will get the new savings passed onto them. That happens to be the regular practice by Tesla and has been seen with previous price drops.
Tesla increased prices earlier in 2022 after the wait time for thousands of local order holders extended out to many months. For some, it was up to 12 months last year.
Now it seems Tesla has caught up with demand and is ramping production back up at Shanghai’s factory to export to markets such as Australia.Â
There is also lots of inventory available for the Model 3 across most states and territories across the country which makes it a great time to buy.Â
The wait time on the Model 3 for new orders is within weeks with most orders expected to be fulfilled by May according to its local configurator.
Image: Tesla, carloop
That’s down from January at the last price drop where the wait time for many of Tesla’s EVs including the Model 3 was 1-4 months.
Until the end of February, Tesla had sold 5,598 Model 3 sedans to Australia. With another big month expected for March, the pricing cuts have come in at a good time.
This year, Tesla is also expected to open many more supercharging sites around Australia to reduce charger and range anxiety. Recently, Tesla has opened up multiple supercharger sites including a large 12-stall site in Campbelltown in NSW last month.