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Why is Tesla so expensive in Australia?

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    Shortly after the i-MiEV was relegated to the annals of automotive history, Tesla entered the market. In the beginning, Tesla tested the waters with its high-performance Roadster vehicle. The manufacturer was encouraged by the interest shown by local consumers in electric vehicles, despite the fact that very few of the sporty electric vehicles were sold in this market.

    After that, Tesla released the Model S, a range of electric vehicles that resembled prestige limousines more than the divisive city cars produced by Nissan and Mitsubishi.

    Even though the American electric vehicle brand has been extremely secretive about its sales numbers in various global markets, including Australia, it has met with apparent sales success in the years since entering the local market. This is the case despite the fact that even the cheapest Model S from 2015 was sold at a price that was more than double that of the i-MiEV.

    The introduction of the Model S brought into existence an electric vehicle that possessed alluring exterior styling, a roomy and desirable interior, and performance that was in excess of what was considered adequate. It was possible to have five adults ride in the Model S without feeling cramped, and the vehicle could travel a respectable distance before needing to be recharged.

    And when looking at the battery capacity of both the Model S and the i-MiEV, it was evident that the Tesla Model S had a significant advantage over the Mitsubishi i-MiEV. When the total selling price of the i-MiEV is divided by the total amount of energy that it can store in its battery (16 kW/h), the cost comes out to more than $3,000 per kilowatt-hour.

    If you apply the same calculation to the Model S 60 from 2015, you will find that the cost has decreased to $1677 per kilowatt-hour.

    Now, you can find every conceivable reason for that, including aggressive pricing in order to establish the brand and more margin in the prestige-level pricing in order to compete directly with other businesses.

    In the meantime, Tesla is analysing the Chinese market and determining how much the Model 3 will sell for in that country. It is even asking Asian customers to speculate as to what its base MSRP will be, claiming that it will make a significant announcement on May 31st, and asking them to do so using the phrase "hazard a guess."

    Bloomberg, which has already taken a stab at Tesla's guessing game, cites inside sources who claim Tesla is currently considering pricing the vehicle between 300,000 yuan ($43,400) and 350,00 yuan ($50,600) before incentives. This information comes from Tesla employees. However, at least one source asserts that the official Chinese MSRP has not yet been finalised, and this source was unable to confirm whether or not the end-of-the-month announcement is even connected to the matter.

    Given the fact that production of the Model 3 in China won't begin for several more months, the announcement that will take place on Friday is probably going to be about something else. However, the fact that Tesla is making an effort to get potential buyers involved in determining the cost of the vehicle indicates that the company is giving this issue serious consideration.

    According to certification documents obtained from nearby Australia, it appears that Tesla will bring the more expensive Performance and Long Range variants of the Model 3 for its initial launch. The same could be true for China, which would mean that the global rollout would be similar to what has been seen in the United States. The introduction of lower-margin variants is probably not going to be a priority until there is less demand around the world for the well-equipped Model 3.

    Tesla's Just Got More Expensive In Australia

    The price of a Tesla vehicle in Australia is already quite high due to import fees, a significant luxury car tax, and a variety of other additional costs, which vary depending on which state or territory you live in. Tesla has just implemented a price hike across the country in an effort to make the hole it already created in your wallet that much deeper.

    According to WhichCar's investigation, Tesla's three models that are currently available for purchase in Australia—the Model X, the Model S, and the Model 3—have all experienced a price hike.

    This means that the Model X, Tesla's most expensive offering in the local market, will now start at a price of $144,900. This price does not include the order and delivery fees, nor does it account for on-road costs for the long-range model. Since CarsGuide reported that it had a moderate increase to $133,900 in December 2019, this means that the most recent increase is a significant increase of $11,000. On top of that, you'll need to add the luxury car tax, which comes to approximately $21,000 for the Model X in its most basic configuration, as well as any other on-road costs that are specific to the region in which you live.

    There will also be an increase in the cost of the performance version of the Model X, which will now start at a base price of $159,900. This is before any of the additional fees that are customarily added on top of the base price. In the month of December, the price was $151,900.

    An overview of Tesla's price increases in Australia

    Before adding on-road costs, ordering and delivery fees, and other miscellaneous expenses, the Model S can now be purchased for a starting price of $130,900. According to CarsGuide, this represents a $6,000 increase from the previous time the price was raised, which was in December 2019 when it was raised to $124,900. The performance model will set you back a tidy $145,900, which is a $2,000 increase from the base price of $143,900.

    The Model 3 was not exempt from the price increase and will now set you back $73,900. This does not include the fees for placing an order or having the vehicle delivered, nor does it include any on-road fees. According to the prices listed on CarsGuide in the month of December 2019, this constitutes a price increase of $6,000 overall. This particular model is exempt from the Luxury Car Tax because it is priced at or just slightly below the threshold.

    In addition, there has been a price increase of $2,000 for each of the performance and long-range options.

    Gizmodo Australia reached out to Tesla Australia to enquire about the company's rationale behind the price hike and to determine whether or not it was in any way connected to the ongoing coronavirus pandemic that is wreaking havoc on global markets. Once we receive a response, the article will be updated accordingly.

    In July 2019, Tesla made the announcement that it was lowering the standard ranges for both the Model X and the Model S, which resulted in the company's minimum prices increasing by several thousands of dollars. They claimed that this move would make their lineup easier to understand.

    A spokesperson for Tesla Australia confirmed to Gizmodo Australia that the company is in the process of "standardising our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X, and Model 3." This move is being made in order to make the process of purchasing one of their vehicles even easier.

    "We are also making some changes to our pricing in order to maintain and further improve the accessibility of our offerings to our customers. We, like many other automakers, will occasionally change our prices as well as the configurations and options we offer."

    The Model 3, which is considered to be Tesla's "budget" model, still has the standard range model available, but as we've already mentioned earlier this year, it's not exactly a cost-effective alternative for many Australians who are hoping to get their hands on an electric vehicle. One that even Elon Musk acknowledges is on the expensive side.

    The Cheapest Tesla In Australia

    The base model of the Model 3 is currently the most affordable option available. However, while this vehicle can be purchased for less than $50,000 in the United States, the base price is significantly higher in Australia.

    In Australia, a Tesla Model 3 can be purchased for as little as $69,425, but this price does not take into account any on-road fees that may be applicable. The price of $70,000 is not exactly what one would consider to be an affordable option, and as we have previously reported, Elon Musk is in agreement with this sentiment.

    However, there are a lot of factors that go into the inflated price tag.

    Currency Conversion

    Getting started with a straightforward example. As is the case with all products, the list price in the United States is not going to be identical to the price in Australia. There is a disparity in the value of our dollars. In most cases, the price of a car in Australia is going to be significantly higher than the price in the United States. This is true even before taking into account factors such as import taxes.

    Tesla Extras

    The starting price of any Tesla is merely a point of departure, much like the starting price of any other car. If you want to add some of the fun and fancy extras, there will be an additional cost associated with doing so.

    Taking the Model X as an example, the base price for any colour other than white is $2,200, and the price of non-standard wheels ranges from $2,900 to $8,000. It will cost an additional $8,500 if you want the complete suite of self-driving capabilities that are currently offered by Tesla (AutoPilot is included at no extra cost).

    In addition to that, you have access to a plethora of additional upgrades and accessories that you can pile on top.

    Tesla On-Road Costs

    On-road costs are something that all vehicles, including Teslas, have to pay for; there is nothing special about Teslas in this regard. The total cost of being on the road will change depending on the model you choose, particularly when it comes to determining the Luxury Car Tax (LCT). This will also be affected by the state in which you reside.

    As an illustration, here is what it might look like to purchase a 2019 Tesla Model S for the price of $134,695 in the state of New South Wales. As a heads up, the base price already includes a $1,375 delivery fee and a $150 order fee.

    Tesla Luxury Car Tax

    The LCT in Australia, which was touched on briefly earlier, is a particularly discouraging piece of information for people who are considering purchasing a Tesla. It is worth explaining in a little more detail because it is possibly the most important factor that contributes to the high cost of purchasing a Tesla in Australia.

    The LCT will add an additional 33 cents to the overall price of the car for every dollar it costs. Another way to look at it is that it increases the price of a vehicle that is eligible for the tax credit by 33 percent.

    This pricing bracket is subject to change; however, beginning with the 2019-2020 tax year, an LCT will be applied to fuel-efficient vehicles with a price tag of $75,526 or more. It applies to anything over $67,525 for vehicles that are not efficient in their use of fuel.

    Because they do not require the use of gasoline, electric vehicles (EVs) are considered to be among the most fuel-efficient vehicles available. If the LCT is going to be defined by fuel consumption, then perhaps electric vehicles shouldn't be subject to the tax in the first place. Not only that, but getting rid of the LCT for electric vehicles would be one way to encourage people to switch to them in order to help the environment.

    On the other hand, this is not the case at the moment. Due to the fact that the base price of any Tesla that can be purchased in Australia is at least $75,526, including the Model 3, the Goods and Services Tax (GST) component of the LCT will be added to the total cost of the vehicle.

    Supply and Demand

    It is abundantly clear that there is a demand for Tesla automobiles. There appears to be a bottleneck in the company's sales process, which has resulted in a growing waitlist for vehicles that were pre-ordered but have not yet been delivered. This occurs on a monthly basis. Tesla Motors, in contrast to more traditional automakers, does not yet possess the production capacity necessary to simultaneously satiate the market's insatiable demand. Because there is more demand than there is supply at the moment, conventional economics dictates that prices will continue to rise. It appears that production, rather than demand, is limiting Tesla's ability to expand. (For further information, see the article titled "What Drives Consumer Demand for Tesla.")

    The movement towards using renewable sources of energy has contributed to the growth in demand. Because Tesla vehicles are fully electric, they do not require the use of gasoline, which is a source of emissions that contribute to climate change, and they do not directly produce carbon dioxide. However, it is still the case that carbon dioxide is produced as a by-product of the production of the electricity that is necessary to charge the car's batteries. Tesla's sleek and contemporary design, as well as its high-tech driver interface and dashboard, which features an impressive all-digital touch-sensitive display, are also contributing factors to the rise in demand.

    Supply and Demand

    It is abundantly clear that there is a demand for Tesla automobiles. There is a bottleneck that is causing a waitlist for vehicles that have been back ordered that is steadily growing in length. The company appears to be setting new sales records on a monthly basis. Tesla Motors, in contrast to more traditional automakers, does not yet possess the production capacity necessary to simultaneously satiate the market's insatiable demand. Because there is more demand than there is supply at the moment, conventional economics dictates that prices will continue to rise. It appears that production, rather than demand, is limiting Tesla's ability to expand. (For further information, see the article titled "What Drives Consumer Demand for Tesla.")

    The movement towards using renewable sources of energy has contributed to the growth in demand. Because Tesla vehicles are fully electric, they do not require the use of gasoline, which is a source of emissions that contribute to climate change, and they do not directly produce carbon dioxide. However, it is still the case that carbon dioxide is produced as a by-product of the production of the electricity that is necessary to charge the car's batteries. Tesla's sleek and contemporary design, as well as its high-tech driver interface and dashboard, which features an impressive all-digital touch-sensitive display, are also contributing factors to the rise in demand.

    In addition to this, Tesla automobiles have excellent performance. They have a range of over 200 miles on a single charge, and the process of recharging is simple and straightforward. While it takes the Tesla S sedan an impressive 5.54 seconds to accelerate from 0 to 60 miles per hour, the Tesla Roadster can accomplish the same feat in fewer than four seconds. Added to all of this is the fact that electric cars produce almost no noise while they are being driven, a quality that many people find to be extremely desirable.

    The recently unveiled Tesla Model X is an SUV that is better suited for families and has the capacity to comfortably seat seven people. Tesla will almost certainly see an increase in demand for its automobiles if it continues to develop new products. The question that remains is whether or not it will be able to build up sufficient capacity in such a short amount of time to produce those automobiles. There are rumours that Tesla is planning to construct a so-called 'gigafactory' in the desert of Nevada. This would enable the company to significantly increase production of both its automobiles and the battery packs that are necessary to power them.

    Battery Technology is Expensive

    Batteries, which are used to store and use electrical power, are the single most expensive component of these cars, with a cost of approximately $500 per kilowatt-hour at the present time. The battery packs in a Model S have a capacity of approximately 60 kilowatt-hours, which indicates that they are responsible for approximately $30,000, or 42.25 percent, of the total price of the vehicle. The price of Tesla's battery packs has increased by fifty percent since 2008, while their capacity to hold a charge has increased by more than sixty percent during that same time period.

    The company has indicated that it is already in the process of increasing the energy efficiency of the batteries further, which will cause the price to fall to approximately $200 per kWh; however, this improvement has not yet been released into production and will not be implemented until later. When these battery packs need to be recharged, the owner of the car must pay approximately 10–12 cents per kilowatt-hour to pay for the electricity. This is in addition to the fixed costs associated with the battery packs themselves.

    A significant amount of time and money is being invested in the research and development of battery technology. It is hoped that within a relatively short period of time, the price of storing energy in batteries will be able to compete with the price of gasoline and other fossil fuels.

    Future battery development

    The battery of an electric vehicle needs to be both "energy-dense" and compact in order to be able to store the necessary power for both performance and range. The lithium-ion battery is currently the most advanced technology available for electric vehicles. This is essentially the same kind of technology that powers your laptop or mobile phone; the only difference is that the battery needs to be scaled up for a vehicle.

    The cost of electric vehicles is expected to become more affordable as more businesses begin research and development and production of rechargeable batteries (while other businesses continue to mine for more lithium). In point of fact, electric vehicles and plug-in hybrids, both of which make use of the same kind of energy reservoir, are becoming more and more affordable already.

    Although the initial expense may appear to be quite high, owners of electric vehicles can anticipate lower operating and maintenance expenses. In fact, the total cost of ownership for electric vehicles is expected to be comparable to that of vehicles powered by internal combustion engines several years before the purchase prices of the two types of vehicles are directly comparable.

    Due to the fact that the average daily driving distance is less than 50 kilometres, the typical person will spend approximately $2.10 on peak price electricity to refuel their daily drive, whereas they will only spend half of that amount on off-peak electricity (free on excess solar generation). That comes out to $14.70 every week.

    Based on the peak price of electricity, if we convert it to dollars per litre, it comes out to approximately 0.32 cents per litre.

    And that's just the cost of keeping things operational day to day. When you consider the fact that electric vehicles require less maintenance and are subject to lower taxes, the difference in price between an electric vehicle and a conventional car becomes inconsequential.

    Electric vehicles are subject to a higher threshold for the Luxury Car Tax, do not have to pay stamp duty in the ACT, and (for example) receive a $100 registration discount in Victoria. The recently established EV Council is collaborating with the Federal Government in an effort to secure additional tax breaks to encourage the purchase of electric vehicles.

    Either steady progress towards refining existing battery technology or some major breakthrough is going to be what brings down the price of purchasing an electric vehicle. The goal of battery research and development is to create a device that is lighter, more compact – in relation to the amount of energy it can store – and less expensive to manufacture. There is no one who knows exactly when this will take place, but groups of people from all over the world are currently working towards the goal, and futurists predict that the significant advancement will take place within the next decade.

    Tesla And EV Incentives In Australia

    Regrettably, the Australian government does not offer very many incentives to stimulate the adoption of electric vehicles. However, there are a few that are led by the state.

    The Registration Fee and Stamp Duty

    In the ACT, buyers of new electric vehicles receive a discount on their registration of 20% and do not have to pay stamp duty on the purchase of the vehicle. The regular "luxury vehicle stamp duty" does not apply to electric vehicles in the state of Victoria. EV owners pay $8.40 per $200 of the market value of the vehicle, as opposed to up to $18. Additionally, EV owners receive $100 off their annual registration fees.

    Both electric vehicles and hybrids are subject to a lower rate of stamp duty in the state of Queensland, which is $2 per $100 up to $100,000 and $4 per $100 for anything over $100,000. Stamp duty can be as high as $6 per $100 for 'polluting vehicles' that are driven on a regular basis.

    On the Tesla website for Australia, you can find additional information about these, as well as the incentives for solar power and renewable energy.

    The price of Tesla vehicles is high, but that hasn't stopped customers from waiting in line to purchase one. One of the reasons that the price is so high is because there is currently a greater demand than there is supply. Increasing production capacity and constructing new factories will undoubtedly assist in maintaining price stability.

    The very high cost of the electric battery packs that supply power to Tesla vehicles is the other primary factor that contributes to the extremely high sticker price of Tesla automobiles. Although the cost of battery technology and its energy efficiency have decreased over the past few years, there is still a need for additional research and development in order to develop an electric vehicle that is truly affordable.

    https://www.youtube.com/watch?v=cH8VoN6Y7nQ

    Conclusion

    When compared to the Mitsubishi i-MiEV, the Tesla Model S was clearly superior. In 2015, the least expensive Model S cost over twice as much as an i- MiEV. Tesla is evaluating the Chinese market to establish a price for the Model 3. Before rebates, Tesla is thinking of selling the Model 3 for between 300,000 yuan and 350,000 yuan (around $43,400 and $50,600). The suggested retail price in China is still being determined. Australia has seen price increases across the board for the three Tesla models currently on sale there.

    The Model S has been released to the public with a base price of $130,900. The on-road expenses for the Model X with a long range are not factored in, and neither are the expenditures associated with placing an order. The price of the Model X, Tesla's most costly vehicle, has also gone up. The standard ranges for both the Model X and the Model S were reduced by Tesla in July 2019. The minimum prices set by the firm therefore increased by several thousand dollars. In Australia, you can acquire a Tesla Model 3 for as little as $69.425 USD. The Luxury Car Tax, in example, is calculated differently based on the vehicle you choose (LCT) Your home state will also play a role in this.

    For every dollar spent on LCT, an additional 33 cents must be added to the final price of the vehicle. In terms of fuel efficiency, electric vehicles are widely regarded as being among the best options. One strategy for getting more people to buy electric cars would be to do away with the LCT. As of right now, Tesla Motors' production capacity is not high enough to meet the market's unquenchable demand. As opposed to more established automakers, Tesla Motors lacks the production capability to meet the market's unquenchable demand all at once.

    Over 200 miles may be driven on a single charge with a Tesla, and the process of recharging is quick and easy. A 'gigafactory,' as Tesla calls it, is in the works for Nevada. They could then ramp up manufacture of cars and battery packs simultaneously. The price of a Tesla's battery pack is roughly $30,000 (42.25% of the car's total cost). The lithium-ion battery is the state-of-the-art solution for EVs right now.

    An average person will spend about $2.10 per day on electricity at peak rates. They can reduce their off-peak electricity costs by 50 percent (free on excess solar generation). The objective of battery R&D is to come up with a gadget that can store the same amount of energy in a smaller package and costs less to produce. New electric car purchasers in the ACT are eligible for a 20% registration discount and are exempt from stamp duty. Stamp duties in the state of Queensland are reduced for buyers of electric and hybrid automobiles.

    Regularly driven "polluting automobiles" can incur stamp duty as much as $6 every $100. In addition, each year EV owners can save $100 on registration expenses.

    Content Summary

    • In the meantime, Tesla is analysing the Chinese market and determining how much the Model 3 will sell for in that country.
    • Bloomberg, which has already taken a stab at Tesla's guessing game, cites inside sources who claim Tesla is currently considering pricing the vehicle between 300,000 yuan ($43,400) and 350,00 yuan ($50,600) before incentives.
    • However, at least one source asserts that the official Chinese MSRP has not yet been finalised, and this source was unable to confirm whether or not the end-of-the-month announcement is even connected to the matter.
    • Given the fact that production of the Model 3 in China won't begin for several more months, the announcement that will take place on Friday is probably going to be about something else.
    • This means that the Model X, Tesla's most expensive offering in the local market, will now start at a price of $144,900.
    • This price does not include the order and delivery fees, nor does it account for on-road costs for the long-range model.
    • There will also be an increase in the cost of the performance version of the Model X, which will now start at a base price of $159,900.
    • However, while this vehicle can be purchased for less than $50,000 in the United States, the base price is significantly higher in Australia.
    • The total cost of being on the road will change depending on the model you choose, particularly when it comes to determining the Luxury Car Tax (LCT).
    • Due to the fact that the base price of any Tesla that can be purchased in Australia is at least $75,526, including the Model 3, the Goods and Services Tax (GST) component of the LCT will be added to the total cost of the vehicle.
    • It is abundantly clear that there is a demand for Tesla automobiles.
    • It appears that production, rather than demand, is limiting Tesla's ability to expand.
    • There are rumours that Tesla is planning to construct a so-called 'gigafactory' in the desert of Nevada.
    • The price of Tesla's battery packs has increased by fifty percent since 2008, while their capacity to hold a charge has increased by more than sixty percent during that same time period.
    • When you consider the fact that electric vehicles require less maintenance and are subject to lower taxes, the difference in price between an electric vehicle and a conventional car becomes inconsequential.
    • Regrettably, the Australian government does not offer very many incentives to stimulate the adoption of electric vehicles.
    • The regular "luxury vehicle stamp duty" does not apply to electric vehicles in the state of Victoria.
    • Both electric vehicles and hybrids are subject to a lower rate of stamp duty in the state of Queensland, which is $2 per $100 up to $100,000 and $4 per $100 for anything over $100,000.
    • The price of Tesla vehicles is high, but that hasn't stopped customers from waiting in line to purchase one.

    FAQs About Tesla in Australia

    Model 3 and Model Y vehicles built for the Australian market now utilise our camera-based Tesla Vision, which relies on Tesla's advanced suite of cameras and neural net processing to deliver Autopilot and related features. Autopilot comes standard on every new Tesla.

    At the time of publication, the Tesla Model 3 is the only available option in Australia, with the Model S and Model X facing an uncertain future amid ongoing supply chain disruptions. Pricing for Model 3 starts at $60,900 for the RWD. The Long Range AWD begins at $73,200 while the AWD Performance tops it at $84,900

    300,000 to 500,000 miles
    According to Elon Musk on Twitter, Tesla car batteries are supposed to technically last for 300,000 to 500,000 miles, which is 1,500 battery cycles. That's between 22 and 37 years for the average car driver, who, according to the Department of Transportation, drives about 13,500 miles per year.

    For most Tesla owners, the FSD is worth it if you drive a lot, commute daily, or frequently go on long road trips. The following are a few examples of situations where most felt like the FSD was worth it; If you drive at least 2 hours round trip when going and coming back from work.

    As it keeps slowing down to around 15mph, your Tesla will notify you that it won't be able to drive soon, and finally, it stops and puts itself into parking. At this point, you'll need to call roadside assistance or a tow truck to get you to the nearest charging station.

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