More competition means more competitiveness, the industry’s voice believes.

PROBABILITY other electric car brands will react to Tesla having introduced lowest-ever pricing on the two cars it sells here seems possible.

In addition to suggesting this, an industry overseer has also said that while the size of the price reductions for the Tesla Model 3 sedan and its Model Y sports utility spin-off was surprising, the American make deciding to reset its stickers was not.

Aimee Wiley (below) chief executive of the Motor Industry Association, believes this just a natural result of increasing competitiveness within the new electric car sector, fuelled by an increasing count of involvers.

Whether or not the weekend’s action, which repositions the Teslas to price far more directly against rivals, notably from China’s MG and BYD, could spark an all-out price war is being steered clear of by the MIA.

But Wiley says that the sector is seeing massive change, at fast rate.

“What we are seeing at the moment are more entrants to the market. 

“Tesla began with a monopoly, which then turned into a duopoly and now, of course, it has very quickly become a very fiercely contested segment.

“In January, there were 37 (electric vehicle) options in the market. Fast forward to today, six months later, and there are 49.

“There are a lot more models coming to the market and we can expect to see an explosion of battery electric vehicles in the next 12 to 24 months, with a lot more options from China.”

The Lower Hutt-based MIA acts on behalf of new vehicles distributors, mainly at political level - where it lobbies Government - but also in public, most frequently in offering opinion in respect to market trends and monthly registrations.

Ironically, Tesla has by apparent choice been the sole big brand outside MIA membership, though Wiley holds hope this might change.

June was a good month for the US marque, with the Model Y achieving as the most popular full electric, with 765 units, with the BYD Atto 3 in second, on 440. The Model 3 count was much lower and there have been reports of that version having accrued a substantial stockpile.

As of Saturday, the price of a standard-range Model 3 has sat at $62,500 before on-road costs. For buyers who successfully achieve the latest Clean Car rebate, which hit on July 1, the net price is $57,572.

This undercuts a long-range MG ZS EV, and leaves it sitting only $10 above than the regular price of the Extended Range edition of the Atto 3, which tipped the Model 3 from top sales standing when it arrived. The Atto 3 has been on a ‘long-term’ special price of $59,990, according to a specialist on-line magazine.

The cost of a Model 3 Performance diminishes from $95,900 to $93,500.

The Model Y’s price has fallen $3400 to $67,500, falling to $62,572 with the latest rebate. The Performance reduces from $100,900 to $97,500.

Though the price revision times with the rebate change, whether that is a specific impetus is unclear. Tesla doesn’t talk to media. 

The NZ price change timed with one of similar magnitude in Australia, where a revised luxury car tax threshold for fuel efficient vehicles also introduced on July 1.

Other media also note that Tesla is close to releasing an updated Model 3, known internally as Project Highland, that is set to see it achieve an improved, higher-capacity battery pack from CATL, the Chinese battery maker that is a favoured supplier. All NZ-market Model 3 and Model Y, which might also be in for revision as the cars on a common platform and share the same drive components, come from Tesla’s factory in Shanghai.

Tesla has also been fiddling with prices elsewhere around the globe at a time when its production has scaled up to point where some industry observers say it is building more vehicles than it is selling.

Tesla moved 466,140 vehicles globally in the second quarter of 2023, when analysts expected about 448,000. 

The deliveries are the most ever in a quarter for the Texas-headquartered make, and were up 83 percent from a year ago, when lockdowns hampered its operations in China. 

There is thought Tesla will take a hit to margins in exchange for volume. 

The Jalopnik website today said sceptics are waiting to see what Tesla’s profit for the quarter looks like when it reports on July 19. 

Another commentator for the Bloomberg news agency, Liam Denning, cited that this marks the fifth quarter in a row of excess production, for a cumulative total of just over 91,000 undelivered vehicles. 

“At a notional cost of about $US38,000 each — the implied average production cost in the first quarter — that’s almost $US3.5 billion of finished inventory, with about $US520 million added in the second quarter.”

Jalopnik said another catch to Tesla’s upbeat sales news is that BYD did even better, particularly on its home turf where its lead widened, having sold 700,244 battery EVs and plug-in hybrids over the same period, a personal best. About half of those were fully-electric cars.