Exclusive: Tesla says it will abandon regular price changes starting with new Model Y

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A senior Tesla executive says the manufacturer will step back from the EV price war when the upgraded Model Y midsize SUV launches with a more stable pricing strategy—at least in Australia—as the brand navigates worsening turmoil linked to politics in the United States.

The heavily-updated Tesla Model Y will arrive in Australia in May 2025, launching first as a pair of Launch Series special editions priced from $63,400 before on-road costs (about $40,000 USD). Regular production models will follow, likely with a slightly lower price tag.

Speaking with Chasing Cars, Tesla Country Director for Australia and New Zealand, Thom Drew, acknowledged the updated Model Y faces increasing competition, particularly from cheaper Chinese EVs, and recognised the need for Tesla to remain competitive.

But not at any cost. Under Drew’s leadership, Tesla Australia appears set to abandon its long-held practice of frequent price adjustments—including for the Model Y, which remained Australia’s best-selling EV in 2024.

Regular Model Y prices coming soon ahead of May 2025 deliveries

“We are certainly not going to get into price wars. I know we have famously been known for changing our prices rapidly over the past several years,” Drew said.

“I really think we have gotten to a point with our pricing where it is where it should be. Once we release the general production pricing for Model Y, I think we are at a really good point. Particularly with the refinements on the [upgraded] vehicle, it is exceptional value for money.”

Pricing for the standard Model Y Rear-Wheel Drive (RWD) and Long Range All-Wheel Drive (LRAWD) trims is expected to be announced soon, with substantial numbers of the revised Tesla—including pre-ordered Launch Series models—already arriving in Australia.

“We are expecting the first deliveries in May. Lots of cars are coming to meet the demand,” Drew said, while confirming that the most affordable Rear Wheel Drive model—sold out in Launch Series guise—will become orderable online within the next couple of weeks.

In 255kW Rear-Wheel Drive form, the Model Y features a 57.5kWh lithium iron phosphate (LFP) battery, delivering 500km of WLTP range, aided by aerodynamic improvements.

The upgraded 378kW Long Range All-Wheel Drive model will now achieve 568-586km of WLTP range from its 75.0kWh nickel manganese cobalt battery pack. A refreshed Performance trim is widely expected to debut soon, catering to Australia’s strong appetite for high-performance cars.

Some volume of the Long Range All Wheel Drive Launch Series is still available for purchase, however, while Tesla Australia continues to offer incentives to clear some remaining stock of the pre-update version of the vehicle. The latter cars are expected to run out in April. 

Some Long Range All-Wheel Drive Launch Series models are still available for sale, while Tesla Australia continues to offer incentives to clear remaining stock of the pre-update version. These older vehicles are expected to sell out by April.

Increasing focus on Tesla product quality over price

Nearly 15 years after entering the Australian market, Tesla may choose to cede the lower-priced segment to new entrants, reinforcing its emerging position as a semi-premium brand that sells on more than price alone.

“We need to make sure we are hyper-focussed on the quality of our products and our competitiveness. [We need to] be looking around today and making sure that we have the best ownership experience to keep our brand at the number-one point,” Drew reflected.

Tesla highlights its ownership experience, which includes exclusive access to a significant portion of its highly reliable Supercharger network and more frequent over-the-air updates than many rivals—giving existing customers access to new features.

But those traditional Tesla selling points have been joined by more traditional improvements in the vehicles themselves, with the major mechanical upgrade to the Model 3 sedan in 2024 considerably enhancing the ride comfort, handling balance, tuning and refinement of that vehicle.

Similar improvements are expected in the Model Y upgrade, with suspension, insulation, and material enhancements sitting beneath a Cybertruck-inspired facelift. A Chasing Cars review conducted on Australian roads is coming soon to confirm the extent of these changes.

Would Tesla really concede cheap territory to new brands?

The proposed pricing policy would mark a dramatic shift from Tesla’s previous approach to competition in Australia. The price of the pre-upgrade Model Y changed more than 10 times since its launch, with adjustments occurring as frequently as three times in two months.

Yet this isn’t even the biggest Tesla news this month. Drew also revealed to Chasing Cars that Tesla Australia is pushing head office to confirm the Cybertruck’s local launch, with necessary engineering and design adaptations to meet Australian regulations.

Still, Tesla Australia’s apparent pledge to avoid price wars and maintain pricing consistency for the Model Y may be difficult to uphold, as the affordable EV market in Australia continues to evolve rapidly.

Just days after Drew’s remarks on Model Y pricing, Chinese rival Geely announced its midsize EX5 electric SUV will start at $40,990 before on-road costs in Australia. Geely, which also owns Volvo, positions the EX5 as a slightly smaller alternative to the Model Y.

As the Chasing Cars road testing program continues to evaluate new entrants in Australia’s budget EV market, it is clear that many—though not all—struggle with mediocre driving dynamics and poorly tuned safety systems. To justify higher pricing, Tesla would need to be above this fray.

Even if the non-Launch Series Model Y drops to its lowest-ever price of $55,900 before on-road costs (about $35,000 USD), it would still be significantly more expensive than less familiar competitors like the Geely EX5, Leapmotor C10, Skyworth BE11, Deepal S07, and XPeng G6.

A situation of this kind has already emerged in some European markets where fresh Chinese brands form the cheapest tier of new EVs while now-proven brands like Tesla and even BYD occupy semi-premium territory being slightly more affordable than models from trusted ‘legacy’ brands. 

However, Tesla’s retreat from the entry-level EV market may be short-lived if its rumoured affordable model—possibly called the Model 2 and previewed by the Tesla Cybercab design study—enters mass production.

Drew had the final word on the relevance of a cheaper Tesla to Australia.

“At the moment, there is no cheaper model that I am aware of. If there was one, absolutely [we would have our hand up].”