Australian Tesla sales significantly drop after a 2-month upward trend
Tesla Model Y Sales Drop Amidst Competition and Incentive Changes
Tesla's Model Y sales took a significant hit in July 2022, with a drop from 3,457 units in June 2022 and 1,353 in July 2021 to 555 units in July 2022. This decline can be attributed to a combination of factors, including increased competition, market uncertainty, and supply issues in key regions like China and the U.S.
In China, Tesla's shipments from its Shanghai plant declined by 8.4% in July, marking the sixth monthly decline out of seven that year, despite the overall Chinese EV market growing 25% YoY. The narrow product range and strong local competition contributed to this decline. In the U.S., sales of the Model 3 and Model Y fell by more than 11%, partly due to the expiration of federal tax credits for these popular models and stricter battery sourcing rules that affected the eligibility for incentives, reducing affordability and demand.
To combat this, Tesla introduced temporary incentives including price discounts and financing deals, but these measures only provided short-term relief and did not reverse the sales decline trend. Tesla also had to cut prices significantly to stimulate demand, such as a $20,000 reduction on the Model Y in some markets.
Negative consumer sentiment and political factors related to CEO Elon Musk have also contributed to sales softness, further complicating Tesla’s efforts to sustain momentum.
Meanwhile, Riz Akhtar, a mechanical engineer and the founder of carloop, a company specializing in Australian EV data, insight reports, and trends, is driving a red Tesla Model 3. In response to the drop in Tesla Model Y sales, Tesla is offering a trade-in incentive of $2,000 for those buying a new or demo Model Y until September 2025. Additionally, Tesla announced a $3,000 lending incentive and a $3,000 novated lease incentive for those buying a new Model Y.
As for Polestar, the company reported 230 sales in July 2022, a decrease from 339 in June 2022. The Polestar 3 had only 3 sales in July 2022, a new low for the year.
In other news, Tesla is developing a more affordable model for the Chinese and U.S. markets, and it is uncertain if this new model will have a local launch before the end of the year. The production of Tesla's affordable models has been pushed back to the second half of 2023.
With the competitive EV market continuing to grow, it will be interesting to see how Tesla and other manufacturers navigate the challenges ahead and maintain their sales performance.
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- Despite the drop in Model Y sales, Tesla introduced trade-in and lending incentives to boost demand.
- As the EV market thrives with competition, it remains to be seen how manufacturers like Tesla and Polestar will sustain their sales figures in the future.
