Tesla announces big change that will affect the cost of its vehicles in major market: 'I think we are at a really good point'
Tesla is aiming to deliver some good news for Australians considering an electric vehicle.
A recent statement from Tesla Australia indicated more stable pricing could be coming to Australia and New Zealand. Tesla's current pricing strategy in Australia is based on demand, which can see prices rise or fall thousands of dollars overnight, but senior Tesla executive Thom Drew suggested Tesla is dropping demand pricing for something more stable.
"I know we have famously been known for changing our prices rapidly over the past several years," Drew told Chasing Cars. "I really think we have gotten to a point with our pricing where it is where it should be. Once we release the general production pricing for Model Y, I think we are at a really good point."
Although 2024 set a record for EV sales in Australia, 2025 is off to a slow start for Tesla in the country, with reports of a 53% drop in sales. Most analysts have attributed that drop in Australia and elsewhere around the world to competition from rival brands and CEO Elon Musk's political statements, but rapidly changing prices can dissuade potential buyers from committing to a purchase too.
It's especially difficult to justify an expensive purchase when the price could unexpectedly drop thousands of dollars by the next morning. In other moments, it can be frustrating for a prospective buyer to see the price drop but be unable to make time for a purchase before the price goes back up, in contrast to a sales event lasting longer.
Another potential cause for Tesla's pricing switch is "rising competition from China's low-cost EVs," according to Not A Tesla App. "Tesla may be avoiding a race to the bottom, where Tesla and Chinese competitors get into an intense price war, and margins become razor thin."
If your priority is saving money, though, consider making your next car an EV. While EVs tend to cost a bit more upfront, EV drivers can save hundreds or thousands of dollars a year on gasoline and maintenance costs (no oil changes plus fewer individual parts that can go bad), and the Department of Energy's new savings tool can help calculate exactly how much you'd save on gas.
Purchasing an EV has never been cheaper, either. The average price for an electric car is $55,000, compared to a gas-powered car at $48,000, and models such as the Chevy Bolt and Nissan Leaf can be bought new for under $30,000. Moreover, used EV sales have been picking up steam lately, especially with reports of many Tesla drivers looking to sell at lower prices than ever before.
As technology advances and production increases, EVs are closing the gap, and if you use available incentives, like the Inflation Reduction Act, you can take several thousand dollars off the price point.
They're not just good for your wallet — EVs are better for the planet, too. Unlike their gas-powered counterparts, EVs produce no tailpipe pollution, making them a much better choice for the environment. Even when accounting for charging and production pollution, EV emissions are still more sustainable than gas cars — with MIT reporting that the average EV is responsible for about half as many grams of carbon dioxide pollution per mile than a gas car.
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Tesla has been losing its share of the market in Australia, but Drew believes Tesla's stable pricing will keep Tesla on top.
"We need to make sure we are hyper-focused on the quality of our products and our competitiveness," Drew said, per Chasing Cars. "[We need to] be looking around today and making sure that we have the best ownership experience to keep our brand at the number-one point."
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