Elon Musk Agrees Tesla Model 3's Australian Price Seems High

Image: YouTube/Powerful JRE

The Model 3 was supposed to be Tesla's budget option for electric vehicle-fans but import fees and taxes meant that for Australians, it was far from that. In a strange omission, it seems Elon Musk agrees it's a bit high too.

A Brisbane-based electric vehicle (EV) user tweeted at the Tesla founder regarding the high cost of the Model 3 in Australia. Musk responded agreeing the price did seem high.

It's an interesting response but whether we'll see a price decrease in Australia any time soon is a completely other thing.

An entry-level Model 3 in Australia will set you back $69,425 with a delivery and order fee included. To drive it on the road, however, you'll need to pay another few thousand on top of that, depending on where you live in Australia. That's just for the entry-level option, which comes with an estimated range of 460 kilometres on a single charge.

Most people would prefer the dual motor all-wheel drive option, which provides a longer range of 620 kilometres. That option, of course, will cost you a lot more coming in at $87,425 plus on-road fees. Choosing a colour other than white will add another $1,500 to $2,900 depending on the choice and the full self-driving capability will tack on another $8,500. Depending on what extras you choose, it's quite easy to exceed the $100,000 mark. So much for a budget option.

Electric vehicles, like Tesla's Model 3, cost that much because of the expensive battery needed to power them but Australia's Luxury Car Tax (LCT) adds a significant amount to that total too.

The LCT imposes a 33 per cent tax on the vehicle's amount above the luxury car threshold. For the 2019–20 tax year, the threshold is $75,526 for fuel-efficient vehicles and $67,525 for other vehicles.

A fuel-efficient vehicle is defined by the Motor Vehicle Standards Act 1989 as a car consuming seven litres per 100 kilometres or less. Tesla vehicles are fully electric consuming no fuel so they fall under this category.

While the LCT is an important revenue stream for the government, some have questioned whether EVs should be excused from it because of the positive implications they could deliver for the environment.

Until something changes though, it's unlikely that electric vehicles are going to replace the budget petrol guzzlers that choke up our roads.

Send help, Elon.