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

Despite facing declining sales in both the U.S. and Europe, Tesla has reported a significant rebound in Australia, where its electric vehicle sales reached their highest point in almost a year during May. The American electric vehicle manufacturer announced on Tuesday that it sold 3,897 vehicles, largely fueled by record sales of the newly updated Model Y compact SUV. Sales of the Model Y in Australia skyrocketed by 122.5% compared to the previous year, although the Model 3 saw a considerable drop in sales. Overall, Tesla's deliveries in Australia increased by 9.3% year over year, and a staggering 675% from April's total of just 500 EVs, according to the Australian Electric Vehicle Council. This council has taken over as the exclusive source for Tesla and Polestar sales figures in Australia after both brands departed from the Federal Chamber of Automotive Industries last year. April had marked Tesla's worst sales performance in Australia for the year. Despite this encouraging rebound in May, the company's total sales in Australia are still down 48.2% year-to-date compared to the same timeframe last year. "Tesla's significant sales growth in Australia this May is a positive indicator, predominantly driven by robust demand for the refreshed Model Y. However, the company continues to face challenges on a global scale," stated Liz Lee, associate director at Counterpoint Research. She noted that Tesla's sales were down 13% year-on-year in the first quarter of the year. Thus, while the recent increase in Australia is noteworthy locally, it does not yet indicate a broader global recovery. In recent months, Tesla's global sales have been impacted by increased competition and reputational challenges stemming from CEO Elon Musk's political commentary and activities. Prior to May, Tesla struggled in Australia amid reports of vandalism and protests related to Musk's collaborations with former President Donald Trump's administration and his support for far-right parties in Europe. On Tuesday, Tesla also revealed that its U.S. sales had decreased by 11% compared to last year. European industry groups highlighted a substantial decline in new Tesla vehicle sales in several countries, including Spain, Portugal, Denmark, and Sweden. However, there were positive developments as well, with Tesla experiencing a remarkable recovery in Norway, where the Model Y contributed to a 213% increase in sales from the previous year. Additionally, Tesla achieved a record 1,545 sales in Turkey last month. This follows a recent press conference where Trump announced Musk's departure from his governmental role, although Musk will retain an advisory position. In a commentary after this announcement, Wedbush analyst Dan Ives expressed that Musk's return to Tesla could be the best news for investors, especially with the highly anticipated rollout of its robotaxi service expected soon. Musk mentioned that Tesla has been testing driverless Model Ys. The timing of Musk's return coincides with intensified competition, particularly from Chinese manufacturers like BYD, which has been expanding its global presence and increasingly competing with Tesla. In April, BYD surpassed Tesla in European sales for the first time, according to JATO Dynamics. The Chinese automaker has introduced various discounts, prompting other manufacturers to follow suit. Reports indicate that Tesla fell behind BYD in total annual sales revenue, and, in a historic moment for the industry, BYD sold more battery electric vehicles in Europe than Tesla last month. Nevertheless, in May, Tesla regained a competitive edge over BYD in Australia, achieving 3,897 sales compared to BYD's 3,225, based on available data. It's important to note that Tesla focuses solely on battery electric vehicles, while BYD also produces hybrid models. As the global competition heats up, Counterpoint's Lee suggested that Tesla should target high-potential markets like India, Southeast Asia, and parts of Latin America, where EV infrastructure and incentives are rapidly developing. "Tesla could gain a significant advantage by entering these markets early, especially if it localizes production and tailors its offerings to meet local demands," she added. In line with this strategy, Tesla announced on Tuesday that it is leasing a warehouse in Mumbai, which is expected to be utilized for vehicle servicing, as part of its long-planned expansion into India. Following the announcements, Tesla's stock rose by approximately 0.5% on Tuesday, though it remains down about 15% for the year.