Tesla slashes Australian prices of best selling models yet again, as EV price war marches on

Tesla, the leading EV brand in Australia with more than 50 per cent of the local electric car market, has once again cut prices on its single motor RWD variants of its Model 3 and Model Y cars by up to $5,000.

This makes both of Tesla’s most popular variants the cheapest they’ve ever been.The Model Y SUV has seen a $5,000 price drop in this round of cuts while the recently refreshed Model 3 has seen its price cut by $4,000.

Both models have had multiple price cuts in the last 2 months which now brings the price of the line-up down to: 

• Tesla Model Y RWD SUV – $55,900 (down from $60,900)
• Tesla Model 3 RWD Sedan – $54,900 (down from $58,900)

With these prices, the driveaway price of Model 3 and Model Y before any state or territory incentives will start at under $62,000. These are well under what Tesla Model Y & Model 3 prices were during the pandemic. 

Tesla Model Y prices in September 2022 were as high as $72,300 before on-road costs, which is $16,400 above the new price. Similarly, prices of the Model 3 were $11,000 above the latest price, starting at over $65,900.

In 2024 so far, sales of both models have made up 14,866 sales with February and March making up 11,682 of the total.

The Model 3 has seen 6,865 sales so far this year4, which is likely to be below what Tesla was expecting given the recent refresh and addition of many more premium features to the sedan compared to the previous generation car.

This refreshed Model 3 now comes with newer high-definition cameras, better-quality materials, ventilated seats, a quieter cabin, improved ride quality and an upgraded sound system.

Regardless of this, the Model 3 remains the second most popular EV in the country by a long shot. The third spot on the EV sales list is held by the BYD Atto 3, which has recorded 2,638 sales over the same period.

Over the last couple of months, Tesla has ramped up the discounts across multiple markets, and last month announced major price cuts in the US and China, its two biggest markets. 

The Chinese market in particular has seen more offers including low interest rate loans to help boost sales.

The latest reductions are likely to attract new buyers to the brand and further put downward pressure on other OEMs selling EVs in the market, particularly in the sub-$40,000 market with price cuts announced by BYD, MG and GWM.

Nissan, Polestar, Peugeot, Renault and Ford have also dramatically cut the prices of their EV offerings in Australia. Let’s see if this translates to more sales in the coming months.