Tesla’s Australia sales soar in May — a bright spot amid struggles elsewhere

Electric vehicles were showcased outside a Tesla store in Melbourne on April 19, 2023.

While Tesla has experienced a drop in sales in the U.S. and Europe, the company saw a positive development in Australia, where its electric vehicle sales reached their highest point in nearly a year in May. Tesla revealed on Tuesday that its sales surged to 3,897 vehicles, with the Model Y compact SUV leading the way in terms of sales. Sales of the Model Y in Australia rose by 122.5% compared to the previous year, while sales of the Model 3 declined significantly. Although total deliveries in Australia were up by 9.3% year on year, they skyrocketed by over 675% compared to April when only 500 EVs were sold by the company. The Australian Electric Vehicle Council provided this data as Tesla and Polestar had withdrawn from the Federal Chamber of Automotive Industries (FCAI) last year, making the EV Council the primary source of sales data for these brands in Australia.

Despite experiencing a sales downturn globally, Tesla’s positive sales growth in Australia for May is seen as a promising sign, mainly driven by the strong demand for the updated Model Y. However, Liz Lee, an associate director at Counterpoint Research, noted that Tesla’s global sales were down 13% in the first quarter, indicating that the rebound in Australia may not necessarily reflect a broader global recovery.

Tesla has encountered challenges in its global sales due to heightened competition and damage to its reputation linked to Elon Musk’s political activities and statements. Reports of vandalism and protests in Australia related to Musk’s ties with the U.S. President Donald Trump’s administration and far-right European parties had a negative impact on Tesla’s sales in the country before May.

Although Tesla faced a decline in sales in the U.S. and several European countries, there were positive outcomes in Norway and Turkey. In Norway, the Model Y contributed to a 213% increase in sales compared to the previous year, while Tesla achieved a record 1,545 sales in Turkey. Despite these positive developments, the overall sales of Tesla in Australia are still down by 48.2% year-to-date compared to the same period last year.

As Tesla reconsiders its strategies amidst increasingly stiff competition, particularly from Chinese EV manufacturers like BYD, industry experts suggest that Tesla should explore emerging markets like India, Southeast Asia, and parts of Latin America. Expanding into these regions could be beneficial for Tesla if it localizes production and tailors its offerings to suit local preferences. Tesla recently announced plans to lease a warehouse in Mumbai as part of its anticipated expansion into India. Tesla’s stock was up by 0.5% in trading on Tuesday and has declined by around 15% year-to-date.