The real story behind this ‘Tesla graveyard’ image in Australia: as Elon Musk faces a major threat

Some have called it the Tesla graveyard: hundreds of new electric cars parked at Melbourne Harbor, waiting for their owners.

Critics argue the scene is a sign that Australia’s growing electric vehicle sales have finally hit a roadblock and are slowing as they have in other nations.

But industry experts and a report on the global market paint a different picture.

Instead of a graveyard in Australia’s ports, they say the scenes show we are finally becoming a bigger player in the global low-emission transport market.

They also say Australian drivers will benefit from a price war as brands fight for greater market share, with Australia becoming a key target for Chinese carmakers facing tariffs in other parts of the world.

The sea of ​​Model 3 and Model Y vehicles is a welcome sight for Tesla Owners Club of Australia national president Peter Thorne, who remembers when the vehicles were difficult to acquire and deliveries took months rather than weeks.

“With current Teslas, you place an order and you’ll get your model faster than you can complete the paperwork because they have them in the country and the inventory is now available,” he tells AAP.

“That’s happening with all these electric vehicle brands right now, so where before it was a six-month wait, now it’s six, four, two weeks.”

While the American carmaker once provided one of the only electric cars on sale in Australia, it now has a lot more competition.

The growing rivalry has led Tesla to lower its prices, with two major cuts in April alone.

The price of Tesla’s Model Y electric SUV fell from $69,300 in 2023 to $55,900 this year, just $1,000 more than the company’s base Model 3.

“Their cost reductions are very strategic and designed to sell certain models,” says Thorne.

“(Chinese manufacturer) BYD is in the same boat and will have to be really cost competitive (to compete).”

Tesla faces strong competition in Australia from BYD, which set a record in May with the sale of 1,914 vehicles, compared to Tesla’s 3,567.

Both brands have reduced prices, with BYD reducing the cost of its Atto 3 SUV by more than $3,500.

Other companies that will reduce electric vehicle prices include MG, Renault, Peugeot, Lotus and GWM, which introduced a permanent $4,000 price cut on its Ora to make it the cheapest electric car in Australia.

Discounts range from $49,010 on the luxurious Lotus Eletre to including on-road charges with the BYD Seal Premium.

Australian Electric Vehicle Association national president Chris Jones said the changes will ultimately benefit drivers considering their vehicle options.

“What we are seeing is a price war and new electric vehicles are getting cheaper,” he said.

Dr Jones says intense competition is driving the trend as traditional brands expand in the market and more Chinese brands launch cars in Australia.

“China is making good, cheap and abundant electric vehicles,” he said.

“They have a willing market in Australia and we have no problem with Chinese-made EVs – we love them.”

“Tesla is trying to find a way to sell into this market and they will have to come up with a lower priced, lower spec vehicle that competes at the lower end.”

Ten Chinese vehicle brands have confirmed plans to launch electric cars in Australia in the coming months, including Leapmotor, Zeekr, GAC Motor, Geely Auto and Skywell.

But Hussein Dia, future professor of urban mobility at Swinburne University, said Chinese carmakers could target Australian drivers more aggressively in the future after the European Union announced higher tariffs on their vehicles.

Charges of up to 38.1 percent will be added to Chinese-made vehicles imported into Europe from July to support its local manufacturing industry.

As Australia no longer has a local industry to protect, Professor Dia said it does not need similar tariffs and Chinese brands could try to bring more vehicles into the country.

“We now have a lot of luxury electric vehicles on sale and high-end SUVs,” he said.

“What we’ve seen in China is small and medium-sized electric vehicles, which is what a lot of people want to buy.”

He said having a wider range of battery-powered vehicles on sale in Australia will help boost their popularity, which continues to grow, although not at the same rate as in 2023.

The BloombergNEF Electric Vehicle Outlook 2024 report released Thursday finds that electric vehicle sales are expected to rise to 20 percent in 2024, while fuel vehicle sales peaked in 2017.

But electric cars are experiencing different growth rates in different countries, with sales falling in Italy and Japan while soaring in the United Kingdom, France, China and India.

“Not all electric vehicle markets around the world will travel in the same direction or at the same speed in 2024,” the report notes.

“EV sales continue to rise globally, but some markets are experiencing a significant slowdown.”

Figures from the Federal Chamber of the Automotive Industry show that electric vehicles accounted for 8.1 percent of all new car sales in May, but sales increased by 26 percent instead of the 161 percent increase recorded in 2023.

Professor Dia says both local and global sales trends indicate electric vehicles will continue to be charged in Australia, just at a slower pace.

“In Australia we continue to see increases,” he said.

“I think it will remain stable, meaning we won’t see the same exponential growth as last year.”