Electric newcomer exposes luxury car pricing

An electric car from California has shown the gulf in pricing with most luxury cars sold in Australia compared with near identical models sold overseas.

The soon-to-arrive new Tesla Model S sedan from $91,400 to $119,900 in Australia, within shout of its $69,900 to $93,400 US price.

Similarly priced models from BMW and Mercedes-Benz cost up to $150,000 more in Australia than the US.

Luxury cars that sell for almost the same price as the Tesla in the US, such as the BMW M5 and Mercedes-Benz E63 S AMG, jump from $92,900 and $99,470 in America to $229,900 and $249,545 in Australia.

Since the Australian dollar boomed after the GFC - at one stage surpassing the value of the US dollar - luxury car makers have been reluctant to radically change prices and step away from traditional price points.

Many also point to pricing of competitors and claim prices are set to have similar relativities to the same models in other markets. 

While there has been some additional equipment added and some minor price reductions, luxury cars sold here can sell for twice as much as the same model in other countries.

BMW spokeswoman Lenore Fletcher acknowledged that “there is a difference in the pricing,” putting it down to taxes, specification levels and lower sales volumes.

But the Tesla appears to debunk those arguments.


The car is likely to sell in significantly lower numbers than those enjoyed by established luxury marques, and it will be subject to a broadly similar tax structure to European models.

A simplified sales structure could help it keep costs down in Australia. Tesla encourages customers to order cars online, which are then delivered by truck and not at a lavish dealership.

Tesla spokeswoman Atsuko Doi says the brand will have a national centre in Sydney, though full sales and servicing arrangements for the brand are yet to be announced.

Mercedes-Benz spokesman David McCarthy says the Tesla’s looks and performance will attract buyers.

“I do think it’s going to generate a lot more interest in electric cars,” he says.

“The buyer of that car is going to be different than buyers of current electric cars.

“It’s  going to be interesting to watch.”

Tesla has made significant inroads on the American luxury car market, where it sells around 1500 cars per month.

The cars have a broader appeal in the states, where fast-charge stations sprinkled across the landscape make it a viable alternative to regular cars.

In Australia, the Tesla will be sold in three specifications known as 60, 85 and P85.

Those nameplates reflect each car’s battery capacity, with the $91,400 60 having a 60kWh battery, 225kW output and 390km range.

The $103,400 85 has an 85kWh battery, 270kW output and 502km range, and the P85 performance model has the same 502km range and 85kWh battery teamed with 310kW of power for $119,900.

Each car has an eight-year battery warranty.

Like many cars, the Model S has an extensive options list. Satellite navigation is part of a $4600 package that includes features such as keyless entry and a powered boot, and features such as parking sensors or fog lamps that are standard on much cheaper cars cost $600 each.

Self-levelling air suspension is a $2800 option, while a performance pack for sharper handling brings 21-inch wheels and firmer suspension for $7900.