Tesla slashes Model 3 prices again; 19% cheaper than 2020

Tesla has slashed the price of its top-selling Model 3 again – this time by up to $7000.

It is the third price reduction for Australia’s top-selling electric car in a year – the most recent Tesla price cut was in April – and makes the Model 3 Standard Range Plus about 19 percent more affordable than it was in the first half of 2020.

The price reductions of between about $3200 and $7000 at the drive-away level mean the Model 3 now sells from about $64,700 drive-away – undercutting EVs such as the Nissan Leaf e+, Hyundai Kona Electric, Kia Niro Electric and Mazda MX-30 Electric.

When the NSW Government rebate and tax deduction kicks in on September, buyers will be able to drive a Model 3 away for about $59,500.

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Prices vary in each state due to local taxes, with the Model 3 Standard Range Plus (SR+) now $59,900 plus on-road costs. That represents a price reduction of almost 5 percent for this round of price drops.

But there have been others before it, especially when Tesla stopped sourcing its Model 3s from the United States and instead brought cars in from China.

Early in 2020 the Model 3 SR+ was $73,900 plus on-road costs – or about $80K drive-away. The total price drop for that single model now totals 23 percent.

The Model 3 Long Range now starts at $73,400 plus on-roads, or about $79,000.

And the fastest Performance model – which once retailed for almost $110,000 – is now $84,900 plus on-road costs, or about $93,000 drive-away. That represents a circa-7-percent price drop in this latest round or about 15 percent in total.

Tesla chasing more sales

The latest Model 3 price drops appear to have been done to boost sales.

While the Model 3 is the top-selling EV in Australia, there have been rumours that Tesla’s still-new Chinese factory that now supplies Australia is running under capacity.

Tesla could simply be shipping more cars to countries such as Australia to keep production numbers at the factory healthy; it’s standard car industry practice for manufacturers to force cars into the market and leave it up to the various countries to sell them so that things on the production line keep humming.

While reports surfaced that Tesla had ‘sold’ some 1500 Model 3s when video surfaced of a big shipment arriving in Australia last month (EV Central understands the exact number was 1572 – and they’ve since been followed by another shipment), it appears many of those cars are yet to be sold.

Tesla has a healthy list of Model 3s listed on its website as being in stock and is quoting delivery times of as little as one week (many rival brands have wait times stretching out months).

Lowering the price has always been the easiest way to shift excess stock.

Conversely, the excess stock Tesla appears to have in Australia could position it perfectly for the incoming NSW EV incentives that kick in on September 1.

Many traditional car makers are already struggling with supply of EVs in Australia. Mercedes-Benz, for example, is believed to have already run out of stock its just-released EQA250 and Volkswagen can’t convince its head office to send any EVs to Australia, such is the demand overseas.

Used Tesla Model 3s now worth a bit less…

As they typically do, the price reductions will flow through to the used-car market, shaving thousands off the price second-hand buyers are willing to pay – and eating into the values sellers can expect.

Of the 19 second-hand Model 3 Standard Range Pluses listed on Carsales today only one was priced below the new asking price for a brand-new car, suggesting sellers may have to readjust their expectations.

While some had the $10,100 Full Self-Driving software option – which appears to be many years away from offering anything like self-driving – others did not and were still priced above the asking price of a new Model 3 SR+.

While Teslas have traditionally held their value well, owners sometimes face a rollercoaster given Tesla new-car prices often fluctuate.