How Long Will the Tesla Model 3 Be #1 in Australia?

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We know that Australia fell in love with the Tesla Model 3.

It is dominating sales here…

65% of all electric car sales in Q1 2022 were the Model 3. That’s almost two-thirds!

Few alternatives, Tesla’s unique business model and a quality electric car has cemented the Model 3s position at the top.

But how long will it last?

Consumer preferences, more competition and Elon Musk’s behaviour will put pressure on that leading position.

This post will assess whether the Tesla Model 3 can hold onto its position as the #1 selling EV in Australia.

Tesla Model 3 Price Australia

Before we dive into it a quick recap of how much the Tesla Model 3 costs.

As of August 2022 the Tesla Model 3 has drive away prices of:

• RwD: $68,289.
• Long Range: $85,979.
• Performance: $100,806.

This is after price increases in March and June.

For reference, the average new car cost in NSW is $40,682. There is also currently a 6–9 month wait time from when you order your Tesla Model 3.

Keeping the Model 3 at the Top

Tesla got off to a hot start in 2022.

65% of all electric cars sold in Q1 were the Model 3.

Lockdowns in China limited Q2 deliveries to 236 Model 3s. This still represented 48% of total first half EV sales (9,680)!

What has led to their dominance in Australia?

1. EV Choice in Australia

Limited.

There is no other way to describe it.

Royce Kurmelovs from The Guardian reported that unfavourable EV policies meant Australia was lagging the world in choice. While bad for consumers this was good for the Model 3.

Less choice for consumers but also less competition for the Model 3!

2. Global Supply Issues — Not for Tesla

Supply chain issues are wreaking havoc on car manufactures.

First there was the semiconductor shortage.

EVs have roughly double the number of semiconductors that petrol cars do. Not great during a shortage!

Covid production halts and the war in Ukraine has put even more pressure on global supply chains. This has resulted in a surging second hand car prices in Australia.

While not immune, Tesla has weathered global supply chain issues that knocked rivals.

They have done this by being vertically integrated. Most things are done in-house.

They make the hardware and the software. They produce their own circuits and design some of the chips.

This allows them to adapt to challenges quicker. During the semiconductor shortage they were able to modify their circuits to be compatible with alternative chips.

They have been able to have quarter after quarter of record global deliveries. This record run is set to end due to lockdowns in Shanghai.

But while others struggled, Tesla were able to keep pumping out cars. Competitors were not in a position to challenge Tesla.

Great for keeping the Tesla Model 3 at the top in Australia.

3. Tesla Model 3 — A Quality Electric Car

It’s available and it’s good.

A great combo!

How good is it?

Wheels Australia rated it a 8.6/10. Carsales a 8.5. While Car Expert gave it a 8.4/10.

High scores from the experts.

It has also been revolutionary. Characterised by a minimalist design and large centralised infotainment unit.

ABC News USA reports these decisions have been ‘astute’ and that carmakers such as Ford, BMW, Mercedes and Polestar are all now playing ‘follow the leader.’

Range is a big deciding factors for people buying an EV. The Tesla Model 3 ranks #1 for range out of the top 15 selling EVs in the first half of 2022 in Australia.

When looking at the Model 3s success, it should not be discounted that Tesla made a high quality EV.

Challenging the Model 3

The Tesla Model 3 has enjoyed being at the top in Australia for several years.

How long will it last?

There are several factors challenging their top spot in Australia.

1. Consumer Preferences in Australia

Australians do not enjoy driving sedans.

There, we said it.

Long gone are the iconic Holden Commodore and Ford Falcon.

The top ten selling models of 2021 back us up.

4 are utes, including the top two sellers — Toyota Hilux and Ford Ranger. 3 are SUV style — Rav 4, CX-5 and MG Zs. 2 are hatchbacks — Corolla and I30. 1 is a 4wd — Prado.

Pretty sure that adds up to 10 and no sedans in sight.

As more EV models are released we believe Australians will flock to SUV style models.

2. Changing EV Policy

We predicted that a change in federal government after the May election would lead to more EV friendly policies.

Right on cue, the government is looking to overhaul weak fuel efficiency standards. This will mean that carmakers can no longer dump their dirty petrol models here.

To service the Australian market, car makers will need to start sending more electric cars here.

This means more competition for the Model 3 in Australia.

3. More Choice for Consumers

Tesla were ahead of the curve with electric cars.

While everyone else was improving their engines Tesla was developing their batteries.

As competitors catch up they will start releasing quality electric cars. In-fact we are seeing this already…

The Hyundai Ioniq 5 is perpetually sold out in Australia. It also won World Car of the Year for 2022.

Once supply chain issues are sorted out SUV styled EVs like the Ioniq 5 and Kia EV 6 will seriously challenge the Model 3.

A big challenger to the Model 3 will be Tesla itself…

The Tesla Model Y recently launched in Australia.

It is tipped to become the most popular EV in Australia. It ticks a lot of boxes — quality Tesla made EV with SUV styling.

Even Elon Musk was surprised by the demand for it in Australia. Speaking of Elon…

4. Elons Behaviour

Rightly or wrongly so, Elon is seen as Tesla.

We reported that some of Elon’s behaviour could put Tesla’s position in Australia at risk.

An aggressive management style, a controversial private life and not focusing on Australia could impact Teslas brand loyalty.

How Long will the Model 3 be #1 in Australia?

You heard it here first.

By the end of 2025, the Tesla Model 3 will no longer be the #1 selling EV in Australia.

A more affordable SUV style electric car will be dominating the leader board.

Conclusion

Australians have loved the Tesla Model 3.

A lack of choice, Tesla navigating global challenges better than competitors and a high quality car has cemented the Model 3 at the top of the Australian sales lists.

Until 2025.

Consumers preferring SUV styling, changing EV policy, more choice and some Elon bad press will challenge the Model 3s top spot.

Could the Tesla Model 3 be dethroned sooner?

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