How far Model Y prices have fallen

Tesla has spent the past year quietly making the Model Y cheaper. Here's where the Australian pricing sat in 2023, based on the latest information available as of 21 Sept. 2023, against the 2024 numbers:

Model Y Variant 2023 Price (AUD) 2024 Price (AUD)
Rear-Wheel Drive $68,900 $60,900
Long Range AWD $69,900 $69,900
Performance AWD $82,900 $82,900

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Then the price fell again. The latest drop makes the Model Y the cheapest it has ever been in Australia, now starting at $55,900 before on-road costs for the entry-level rear-wheel-drive variant. Part of it is Tesla's own doing: better production efficiency, economies of scale as volume ramps up, and aggressive pricing to grab market share. Currency swings play a part too. But the bigger picture is a global market where competition has caught up and overseas demand has cooled.

The run of cuts has left people who already bought one scratching their heads. If you paid $68,900 for a rear-wheel-drive last year, watching it slide to $55,900 stings, and resale takes the hit. The counterweight is that cheaper EVs pull more buyers in, which over time means more charging infrastructure and a healthier used market to sell into.

The price of a new Tesla Model 3 or Tesla Model Y continues to plummet in Australia, making it an attractive option for new buyers but a point of concern for current owners.

The case for buying now

At this price the Model Y is simply a lot of car for the money. You get fast acceleration, long range, Tesla's Autopilot, over-the-air updates, and access to the Supercharger network. Delivery is currently one to three months, so buying isn't a wait-forever proposition.

The catch is the usual EV catch. Even after the cuts, it's still dearer upfront than a comparable petrol car. And the Model Y isn't flawless. Owners have flagged build-quality niggles and the odd software glitch, so go in with eyes open. Popularity is a real signal, but it shouldn't be the only reason you sign.

Popularity alone shouldn't be the sole reason to buy; consider all factors carefully.

Is it worth waiting for an update?

This is where it gets murky. There were reports a year ago that Tesla planned to update the Model Y this year, but they faded amid the weak reaction to the expensive Cybertruck and other distractions. Any near-term change is likely to be minor rather than a redesign. As Drive notes, this update is expected to be followed by a more comprehensive facelift for the Model Y later this year or sometime next year.

Worth remembering is that a lot of what a "new" Tesla brings arrives over the air anyway. Wireless updates keep pushing out new features, performance tweaks and safety improvements to cars already on the road. Sentry Mode watches the car when it's parked and unattended. The current Model Y already has 2158 litres of storage and the Tesla Mobile App for keyless driving and remote climate control. So the gap between today's car and a facelifted one may be narrower than the word "update" suggests.

What the market is doing

The price cuts have split opinion. Some buyers are thrilled to get into a Tesla for less; others worry what constant discounting does to the brand. On balance, lower prices can lead to increased consumer adoption of EVs, and as they get cheaper more people make the switch.

The volume story backs that up. Purchases more than doubled in 2023 compared to 2022, continuing a trend of sales doubling year-on-year in Australia since 2020. And the discounting may not be over. Car expert Paul Maric told Yahoo Finance prices might not have bottomed out just yet. "I think it could go further," he said. Several popular EV makers have slashed prices over recent months, largely because competition has intensified.

Longer term, the analysts don't agree. Marketing experts, investors and analysts are split on how much Elon Musk's brand issues matter for Tesla, with some pointing to the CEO's outspokenness dragging on sentiment and others betting the company's innovative edge keeps sales moving. The predictions stay uncertain. What isn't in doubt is that EV adoption keeps climbing.

The cost of buying a Tesla, the world's most popular electric vehicle, has plunged in recent times, pointing to trouble at the auto giant.

Other EVs in the same money

The Model Y isn't the only option at this price. Polestar, MG and Nissan all have cars in the bracket, with the Polestar 2 Standard Range and the MG ZS EV among the popular picks. Here's how a few stack up on range and charging:

Model Range (km) Charging Time (hrs) Key Features
Polestar 2 Standard 470 8 Advanced driver assistance systems
MG ZS EV 263 7 Affordable pricing, compact design
Nissan Leaf E+ 385 7.5 ProPILOT, e-Pedal

Each has a trade-off. The Polestar 2 Standard Range gives you the longest range here and a properly sorted feature set, but sits at a higher price. The MG ZS EV is the affordable, compact choice, at the cost of a shorter 263km range. The Nissan Leaf E+ splits the difference with clever driving aids like ProPILOT and e-Pedal on a moderate range. Which one fits comes down to how far you actually drive and what you'll pay for the extra kilometres.

Financing and incentives in Australia

The government is putting $500 million into measures to drive EV take-up, including a much bigger public charging network. States are pitching in too. In New South Wales, kerbside chargers are appearing, and the Australian Capital Territory (ACT) has several incentives for EV drivers that range from reduced registration fees to interest-free loans.

On finance, a standard car loan is one route, but plenty of banks now offer green loans built for EVs, often at lower rates. Leasing is getting more popular as well, letting you run an EV without committing to owning it. Yes, the sticker is higher than a petrol equivalent. But cheaper running costs, lower maintenance and the incentives above can make the sums work over the life of the car.

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